GIFT   OF 
MICHAEL  REESE 


^:Mm>rJ^ 


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http://www.archive.org/details/economicinterpreOOrogerich 


THE   ECONOMIC  INTERPRETATION 
OF  HISTORY. 


BY  THE  SAME  AUTHOR. 

SIX  CENTURIES  OF  WORK  AND  WAGES. 
The  History  of  English  Labor  (1250-1883). 
Octavo,  pp.  591 $3.00 

"  The  author  supports  his  argument  by  so  many  strong  con- 
siderations, that  he  is  entitled  to  the  patient  study  of  all  who  are 
interested  in  economic  subjects." — N'.  V.  Commercial  Adver- 
tiser. 

"  The  volume  that  lies  before  us  is  certainly  the  most  import- 
ant work  issued  by  an  English  economist  since  the  publication 
of  Tooke's  great  work  on  prices  and  Mill's  r6sum6  of  English 
political  economy."— JV.  Y.  Herald. 


The  Economic 
Interpretation  of  History 


{Un    ^ 


^x^-»^/»V>«** 


/94i^ 


{LECTURES  DELIVERED  IN 
WORCESTER   COLLEGE  HALL,  OXFORD,  1887-8) 


BY 

JAMES    E.   THOROLD    ROGERS 

PROFESSOR    OP    POLITICAL    ECONOMY    IN    THE    UNIVERSITY    OF    OXFORD  AND 

OF  ECONOMIC  SCIENCE  AND  STATISTICS,   KING'S  COLLEGE,   LONDON, 

AUTHOR   OF  "SIX    CENTURIES    OF    WORK    AND   WAGES,** 

*'A   HISTORY   OF    AGRICULTURE  AND  PRICES  IN 

ENGLAND,''  ETC. 


X3NIVEKSITY 


NEW  YORK 
G.    P.    PUTNAM'S    SONS 

LONDON :  T.  FISHER  UNWIN 

MDCCCUUCXIX 


;-« 


<1 


^^^f 


PBEFACE. 


The  lectures  contained  in  this  volume  wgre  delivered  in  the  hall  of 
the  author's  College  (Worcester,  Oxford)  in  his  capacity  as  lecturer 
in  Political  Economy  to  that  Society.  They  were  open  to  all 
members  of  the  university,  and  were  very  numerously  attended. 
I  mention  this,  because,  being  printed  as  they  were  read,  the  fact 
may  explain  or  excuse  the  various  local  allusions  which  they  con- 
tain, and  the  occasional  repetitions  of  statement  which  will  be 
found  in  them.  The  business  of  a  lecturer  is  to  teach  as  best  he 
can. 

I  should  be  the  last  person  to  deny  that  there  are  economical 
generalities  which  are  as  universal  in  their  application  as  they  are  .^ 
true.  Such,  for  example,  are  those  which  affirm  that  the  indi- 
vidual has  an  inalienable  right  to  lay  out  his  money,  or  the  pro- 
duce of  his  labour  to  the  best  advantage,  and  that  any  interference 
with  that  right  is  an  abuse  of  power,  for  which  no  valid  excuse 
whatever  has  been,  or  can  be,  alleged.  In  other  words,  there  is  no 
answer  to  the  claim  of  free  exchange.  Of  course  I  am  well  aware 
that  an  answer  has  been  attempted,  and  that  civil  government  con- 
stantly invades  the  right.  The  invasion  is  brigandage  under  the 
forms  of  law.  Other  illustrations  can  be  given,  as  that  the  police 
of  society  must  always  regulate  the  trade  in  instruments  of  credit, 
that  certain  services  are  part  of  the  function  of  government,  that 
the  satisfaction  of  contracts,  under  an  equitable  interpretation, 
must  be  guaranteed,  that  the  only  honest  rule  in  taxation  is 
equahty  of  sacrifice,  with  what  such  a  rule  implies  or  involves,  and^ 
-so  on.  It  is  very  likely  that  in  practice  government  violates  these  \ 
economical  principles,  and  gives  more  or  less  plausible  reasons  for    1 


vi  PBEFACE. 

its  misconduct.  And  as  wrongs  done  by  government  have  an  endur- 
ing effect,  it  is  difficult,  if  not  impossible,  to  interpret  any  problem 
in  political  economy,  without  taking  into  account  those  historical 
circumstances  of  which  the  present  problem  is  frequently  the  result, 
and  occasionally  to  examine  the  present  political  situation.  In  brief, 
,  any  theory  of  political  economy  which  does  not  take  facts  into  ac- 
count is  pretty  sure  to  land  the  student  in  practical  fallacies  of  the 
grossest,  and  in  the  hands  of  ignorant,  but  influential  people,  of  the 
most  mischievous  kind.  I  could  quote  these  fallacies  by  the  dozen. 
Some  have  been  over  and  over  again  refuted  ;  others  still  possess 
vitality.  Some  are  slowly  losing  their  hold,  especially  in  practical 
politics,  which  is  becoming  every  day  more  economical.  Many  of 
these  errors  die  hard,  especially  when  they  assume  the  form  of  a 
vested  interest ;  sometimes  they  are  maintained  as  part  of  the  con- 
tinuity of  policy ;  sometimes  they  are  defended  by  bold  and  baseless 
assertions.  In  time,  they  become  the  subjects  of  parliamentary 
compromise,  at  last  they  are  swept  away  and  repudiated.  Any 
student  of  the  economical  laws  which  can  be  found  in  the  historical 
statute  book,  will  constantly  find  that  the  wisdom  of  one  genera- 
tion is  the  folly  of  another. 

Many  years  ago  I  began  to  suspect  that  much  of  the  political 
economy  which  was  currently  in  authority  was  a  collection  of 
logomachies,  which  had  but  little  relation  to  the  facts  of  social  life. 
Accident,  and  some  rare  local  opportunities,  led  me  to  study  these 
facts  in  the  social  life  of  our  forefathers,  facts  of  which  the  existence 
was  entirely  unsuspected.  I  began  to  collect  materials, chiefly  in  the 
form  of  prices,  and  at  first  of  the  necessaries  of  life.  But  I  soon 
widened  my  research,  and  included  in  my  inquiry  everything 
which  would  inform  me  as  to  the  social  condition  of  Englishmen, 
six  centuries  ago  and  onwards.  Gradually,  I  came  to  see  how 
Englishmen  lived  through  these  ages,  and  to  learn,  what,  perhaps, 
I  can  never  tell  fully,  the  continuous  history  of  social  life  in  this 
country,  np  to  nearly  recent  times,  or  at  least  till  that  time  in 
which  the  modern  conditions  of  our  experience  had  been  almost 
stereotyped.  By  this  study,  I  began  to  discover  that  much  which 
popular  economists  believe  to  be  natural  is  highly  artificial ;  that 
what  they  call  laws  are  too  often  hasty,  inconsiderate,  and  in- 
accurate inductions  ;  and  that  much  which  they  consider  to  be 


PBEFACE,  vii 

demonstrably  irrefutable  is  demonstrably  false.  ^  I  have  often  had 
to  conclude  that  the  best-intentioned  thinkers  and  writers  have 
been  supremely  mischievous,  and  that  in  attempting  to  frame  a 
system,  they  have  wrecked  all  system.  It  must,  I  think,  be 
admitted  that  political  economy  is  in  a  bad  way  :  its  authority  is 
repudiated,  its  conclusions  are  assailed,  its  arguments  are  com 
pared  to  the  dissertations  held  in  Milton's  Limbo,  its  practical 
suggestions  are  conceived  to  be  not  much  better  than  those  of  the 
philosophers  in  Laputa,  and  one  of  its  authorities,  as  I  myself 
heard,  was  contemptuously  advised  to  betake  himself  to  Saturn. 
Now  all  this  is  very  sad.  The  books  which  seemed  to  be  wise  are 
often  compared  to  those  curious  volumes  of  which  the  converts  at 
Ephesus  made  a  holocaust.     And  the  criticism  is  just. 

The  distrust  in  ordinary  political  economy  has  been  loudly  ex- 
pressed by  working  men.  And,  to  speak  truth,  one  need  not  wonder 
at  it.  The  labour  question  has  been  discussed  by  many  economists 
with  a  haughty  loftiness  which  is  very  irritating.  The  economist, 
it  is  true,  informs  them,  that  all  wealth  is  the  product  of  labour, 
that  wealth  is  labour  stored  in  desirable  objects,  that  capital  is  the 
result  of  saved  labour,  and  is  being  extended  and  multiplied  by  the 
energies  of  labour.  Then  he  turns  round,  and  rates  these  workmen 
for  their  improvidence,  their  recklessness,  their  incontinence  in 
foolishly  increasing  their  numbers,  and  hints  that  we  should  be  all 
the  better  off  if  they  left  us  in  their  thousands,  while  there  are 
many  thousands  of  well-off  people'  whose  absence  from  us  would  be_ 
a  vast  gain.  I  have  never  read  in  any  of  the  numerous  works  which 
political  economists  have  written,  any  attempt  to  trace  the 
historical  causes  of  this  painful  spectacle,  or  to  discover  whether  or 
no  persistent  wrong  doing  has  not  been  the  dominant  cause  of  Eng- 
lish pauperism.  The  attempts  which  workmen  have  made  to  better 
their  condition  have  been  traduced,  or  ignored,  or  made  the  subject 
of  warnings  as  to  the  effects  which  they  will  induce  on  the  wage 
fand,  this  wage  fund,  after  all,  being  a  phantasm,  a  logomachy.  In 
the  United  States  the  case  is  worse.  A  writer  will  publish  a  book 
on  wages,  and  deliberately  ignore  the  effect  of  the  American  tariff 
on  the  real  wages  of  workers.  If  he  knows  anything  at  all  of  what 
he  is  writing  about,  and  is  not  merely  writing  for  office,  he  should 
be  aware  that  no  fertile  customs  revenue  can  come  from  anything 


viii  PBEFAGE, 

but  the  expenditure  of  the  poor,  and  should  not  need  that  Mr. 
Washbourne,  the  late  Minister  of  the  Union  at  Paris,  should  tell 
him,  that  smuggling  is  an  all-devouring  passion  with  the  wealthy 
American,  and  the  corruption  of  revenue  officers  the  constant 
machinery  for  the  practice. 

Two  things  have  discredited  political  economy — the  one  is  its 
traditional  disregard  for  facts  ;  the  other,  its  strangling  itself  with 
definitions.  The  economist  has  borrowed  his  terms  from  common 
life.  Now,  unless  the  words  one  uses  are  strictly  limited  in  mean- 
iing,  as  those  are  which  express  geometrical  forms,  or  chemical 
compounds,  no  word,  and  for  the  matter  of  that  no  definition  of 
the  word,  ordinarily  covers  what  the  man  who  uses  the  word  intends 
by  it.  He  gives,  may  be,  a  definition  of  the  thing  or  thought,  and 
succeeding  vnriters  who  inherit  his  word  begin  to  expand  or  vary  it, 
not  taking  counsel  with  the  facts,  but  only  with  their  own  experiences 
or  impressions.  Now  word-spUtting  and  definition-extending  is  a 
most  agreeable  occupation.  It  does  not  require  knowledge.  It  is 
sufficient  to  be  acute.  Persons  can  spin  out  their  definitions  from 
their  inner  consciousness  by  the  dozen,  aye,  and  catch  the  unwary 
in  the  web.  But,  above  all  things,  the  economist  claims  to  be 
practical.  He  is  engaged,  as  he  teUs  you,  in  the  analysis  of  social 
man,  firom  a  particular  point  of  view.  This  view  is  especially  the 
function  of  government  and  the  state.  If  his  conclusions  are  taken 
rightly,  they  are,  or  should  be,  the  basis  of  Parliamentary  and 
Administrative  action.  But  it  is  appalling  to  think  of  what  the 
consequences  would  have  been,  if  some  so-called  economical  verities 
had  been  translated  into  law.  It  is  grievous  enough  to  note  what 
the  consequences  have  been,  when  some  of  these  rash  inferences 

J  have  been  accepted  as  guides  in  statesmanship.  I  have  attempted 
to  illustrate  what  I  mean  in  these  lectures. 

,^^"The  lawyer  gives  an  arbitrary  meaning  to  words  or  phrases, 
and  will  not  suffer  these  meanings  to  be  traversed.  Unless  he 
did  so,  the  practice  of  law  would  be  an  impossible  chaos.  It 
does  not  signify  to  him  that  a  conveyance  to  a  man  and  his  heirs 
was  meant  to  give  two  estates.  He  insists  that  in  his  language 
it  only  gives  one,  in  the  first  place,  probably,  for  Biblical  reasons. 
The  same  fact  applies  to  the  meaning  which  it  assigns  to 
words  implying  certain  commercial  instruments.      Mr.   Justice 


PBEFACE.  « 

Byles  defines  the  legal  meaning  of  a  bill  of  exchange,  and  his  defi- 
nition is  accepted  as  conclusive,  as  regards  drawer,  acceptor,  an(5 
negotiators.  It  is  no  use  k)  wrangle  whether  the  judge's  definition 
is  capable  of  amendment.  It  is  sufficient  that  the  interpretation  is 
fixed,  beyond  cavil  or  dispute.  But  there  are  subjects  of  the  pro- 
foundest  human  interest  in  which  no  such  final  authority  is 
accepted.  These  have  been  strangled  by  dogmas,  definitions, 
logomachies,  till  the  spirit  of  the  whole  matter  evaporates  in  airy 
metaphysics.  Now  in  the  midst  of  this  idle  and  unprofitable  strife 
of  tongues,  it  is  not  wonderful  that  there  are  people  who  think  that 
the  GaUios  ought  not  to  be  censured  for  indifference.  But  where 
authority  is  not  allowed  to  define  words,  the  wrangle  as  to  their 
meaning  is  perennial. 

My  treatment,  then,  of  my  subject  is  as  follows.  You  have  a 
number  of  social  or  economical  facts,  many  of  them  containing 
problems  of  a  serious  and  urgent  character.  So  serious  are  they  that 
many  persons — an  increasingly  large  number  of  persons — demand, 
if  no  other  solution  is  to  be  given,  that  society  must  be  recon- 
structed on  new  lines,  as  Frankenstein  made  his  man,  or  monster. 
To  meet  these  people  with  the  law  of  supply  and  demand,  to  point 
out  to  them  the  bliss  of  unrestricted  competition,  and  to  rebuke 
them  with  the  Malthusian  law  of  population,  the  Eicardian  theory 
of  rent,  and  the  margin  of  unproductive  cultivation,  is  to  present 
them  with  logomachies  which  they  resent.  They  believe  that 
^economists  are  uttering  optimism  to  order.  In  a  vague  way,  they 
are  under  the  impression  that  the  greater  part  of  the  misery  which 
they  see  is  the  direct  product  of  laws,  enacted  and  maintakied  in 
the  interest  of  particular  classes.  And,  on  the  whole,  they  are  in 
the  right.  Most  of  the  problems  which  vex  society  have  an  his- 
torical origin,  sometimes  a  present  cause,  though  more  rarely. 

Now  I  made  it  my  business  in  these  lectures,  as  I  have  done  in 
others,  since  I  have  been  restored  to  an  office  of  which  I  was  de- 
prived because  I  traced  certain  social  mischiefs  to  their  origin, 
twenty  years  ago,  to  examine  into  and  expound  the  history  of  social 
facts.  Of  course  I  am  almost  entirely  the  authority  for  the  facts 
which  I  cite,  with  one  notable  exception,  i.e.y  the  economical  laws 
in  the  Statute  Book.  These  laws  are  not  to  be  found  in  the  volumes 
which  go  by  the  name  of  the  statutes  at  large,  for  when  the  law  has 


S  PEE  FACE. 

been  repealed,  or  become  obsolete,  or  was  temporary  only,  it  is 
dropped  out  of  these  collections,  and  very  few  lawyers  know  anything 
of  the  history  of  law.  They  are  to  be  found  only  in  the  collection 
which  was  published  at  the  beginning  of  the  century,  and  was 
continued  to  the  accession  of  the  House  of  Hanover.  These  lec- 
tures, then,  are  mainly  founded  on  the  facts  which  are  collected  in 
my  history  of  prices,  and  I  presume  that  even  the  most  arrogant  of 
the  metaphysical  economists  will  allow  that  the  facts  of  social  life 
go  for  something  in  th^e  solution  of  economical  questions.  If  he 
does  not,  I  will  leave  him,  like  the  poet  in  Horace,  to  his  mad- 
nesa 

My  reader  will  find  that  I  occasionally  refer  to  the  experiences 
which  I  gained  when  I  was  in  the  House  of  Commons.  Many  of 
my  audience  were  young  men,  to  whom  this  kind  of  position  is 
likely  to  be  an  early  object  of  ambition.  Now  I  am  not  one  of 
those  who  deprecate  party  strife.  I  know  that  rightly  taken,  party 
is  the  perpetual  struggle  of  good  against  evil,  and  I  have  a  tolerably 
clear  instinct,  fortifiedinto  conviction,  of  where  the  evil  always  is  with 
which  the  good  battles.  But  the  experience  of  Parliamentary  life, 
to  him  who  will  learn,  teaches  one  how  just  but  angry  discontent  is 
baffled,  of  how  one  must  wait  for  opportunities  in  order  to  undo 
wrong-doing,  and  how,  under  the  name  of  compromises,  one  has  to 
accept  half  for  whole  truths.  And  besides,  the  sphere  of  political 
action  is  so  vast  and  so  complicated,  the  forms  of  our  Constitution 
give  so  enormous  a  power  to  the  Administration,  and  all  administra- 
tions are  so  enamoured  of  the  possible,  instead  of  the  true,  that  no 
more  instructive  education  can  be  given  one  than  to  watch 
and  take  part  in  the  battle  of  Parliamentary  forces.  To  the  his- 
torical economist,  the  lesson  is  invaluable.  I  think  I  have  almost 
exhausted  the  lesson  in  my  own  person,  or  at  least  to  my  own 
capacity. 

It  is  no  doubt  more  profitable  to  an  economist  to  be  an  optimist  or 
an  alarmist,  to  dilate  on  the  numbers  and  the  wages  of  the  working 
classes  with  one,  to  predict  the  exhaustion  of  coal  with  another,  and 
to  dwell  on  the  margin  of  cultivation  with  a  third.  But  the  pro- 
gress of  the  working  classes  is  exceedingly  unsatisfactory,  and  has 
been  enormously  exaggerated  by  those  who  have  written  on  it ; 
while  the  exhaustion  of  coal  and  the  margin  of  cultivation  are  scares, 


PBEFACE.  xi 

which,  I  think,  I  have  generally  disposed  of  in  these  pages.  But,  in 
point  of  fact,  these  economists  have  generally  been  fairly  well-to-do 
people,  who  have  only  had  a  lofty  sympathy  with  those  who  struggle 
for  a  living.  And  the  worst  of  it  is,  that  they  are  so  profoundly 
ignorant  of  the  social  facts  on  which  they  profess  to  be  dogmatic. 
A  man  will  chatter  over  the  margin  of  cultivation  who  does  not 
know  a  field  of  wheat  from  a  field  of  barley ;  of  the  exhaustion  of 
coal  deposits  when  he  does  not  know  their  extent,  and  is  not  aware 
of  the  economies  of  their  use  ;  of  the  condition  of  workmen,  when 
he  is  entirely  unacquainted  with  the  fact  that  they  were  cruelly 
oppressed  up  to  recent  times.  For  political  economy  like  this  I 
have,  and  I  trust  I  always  shall  have,  the  heartiest  contempt. 

Of  course  a  resolute  determination  to  look  into  and  substantiate 
the  causes  which  have  so  mightily  hindered  the  economic  progress  of 
my  countrymen  is  unpopular  with  the  least  deserving  and  least 
valuable,  but  often  most  powerful,  classes  of  the  community.  I  had 
some  time  ago  to  demand  of  the  chivalrous  Lord  Iddesleigh,  that 
he  should  substantiate  a  charge  of  communism  which  he  made 
against  me,  by  reference  to  anything  which  I  had  said  or  written  in 
favour  of  a  violent  reconstruction  of  society.  He  was  constrained 
to  admit  that  he  had  found,  and  could  find  nothing,  and  politely 
congratulated  me  on  not  being  associated  with  such  a  platform. 
But  I  have  constantly  noticed  that  men  who  are  entirely  devoid  of 
any  sense  of  political  and  social  justice  are  fond  of  charging  their 
critics  with  sinister  designs  against  property  and  order.  So  I  am 
told  that  some  of  the  frantic  advocates  of  violent  reconstruction 
allege  that  I  am  a  socialist  without  knowing  it.  But  I  know  very 
well  what  is  the  issue,  the  natural,  just,  and  inevitable  issue,  of  all 
attempts  to  cure  wrong-doing  by  violence,  and  to  meet  the  misdeeds 
of  government  by  a  propaganda  of  anarchy. 

The  strength  of  communism  lies  in  the  misconduct  of  admini- 
strations, the  sustentation  of  odious  and  unjust  privilege,  and  the 
support  of  what  are  called  vested  interests,  i.e.j  what  is  in  the  main 
an  indefensible  position  or  an  indefensible  claim  to  economic 
existence.  I  have  pointed  out  what  is  the  nature  of  some  among 
these  grave  social  evils  in  the  following  pages,  and  though  I  cannot 
foresee  that  the  English  people  will  be  induced  to  accept  the 
theories  of  those  who  would  recast  society  by  the  forcible  appro- 


xii  PBEFACE, 

priation  of  land  and  capital,  yet  it  is  quite  reasonable  to  predict  that 
they  who  have  hitherto  taken  an  unfair  advantage  of  their  position 
and  their  influence,  may  hereafter  get  less  than  justice  from  in- 
structed discontent.  The  policy  which  puts  all  local  taxation  on 
occupiers,  which  allows  the  owners  of  mansions  and  parks  to  be 
judges  of  their  own  contributions  to  taxation,  the  rapine  which  con- 
fiscates improvements  under  the  pretence  of  free  contracts,  will 
sooner  or  later  be  met  with  a  reversal  which  will  be  far  from  agree- 
able to  those  who  profit  by  present  conditions.  In  nothing  is  this 
more  visible  than  in  agriculture,  where  the  confiscation  of  the 
tenants'  capital  has  been  followed  by  the  destruction  of  British 
agriculture,  and  as  yet  by  ignorant  discontent.  But  it  is  clear  that 
the  control  of  the  landowner's  power  in  the  disposition  of  his  rights 
is  imminent,  that  it  is  nearly  completed  in  Ireland,  that  it  is  mak- 
ing great  progress  in  other  parts  of  Great  Britain,  and  that  it  is 
rapidly  coming  within  the  range  of  practical  politics.  The  joint 
ownership  of  landlord  and  tenant,  in  which  the  interest  of  the 
former  is  to  be  fixed,  that  of  the  latter  is  to  be  improvable,  is 
already  advocated  by  persons  of  no  mean  influence.  The  Agricultural 
Holdings  Act  is  an  instalment,  a  compromise,  the  complement  of 
which  is  not  far  distant.  The  claim  made  to  the  unearned  incre- 
ment is  met  by  the  demand  that  this  very  increment  should  be  the 
object  of  exceptional  taxation,  and  the  demand  is  daily  becoming 
more  minatory  and  coherent.  Englishmen  are  beginning  to  see 
that  their  domestic  troubles  are  mostly  of  their  own  making,  and 
when  they  learn  the  causes,  they  will  be  wholesale  in  their  remedial 
measures. 

Political  economy,  rightly  taken,  is  the  interpretation  of  all  social 
conditions.  It  is  justly  distrusted  if  it  is  suspected  of  being  a  de- 
fence of  abuses.  In  the  theory  as  to  how  wealth  is  distributed,  the 
true  centre  of  all  economical  inquiries,  the  suspicion  that  it 
deliberately  advocates  an  unjust  distribution,  hopelessly  discredits 
it.  And  when  men  despair  of  equity,  the  just  rights  of  those  who 
have  strained  those  rights  are  in  danger.  I  cannot  agree  with  Mr. 
George,  but  I  am  amazed  to  find  how  popular  his  theory  is.  It  is 
entirely  the  outcome  of  economical  fallacies,  hitherto  treated  as 
indisputable  truths.  The  unearned  and,  according  to  Mr.  George, 
the  entirely  undeserved  increment  is  the  key  to  the  passionate  and 


PEE  FACE,  xiu 

seductive  proposals  of  "  Progress  and  Poverty."  Now  the  impulses 
bred  by  this  remarkable  book  are  not  met  by  definitions  and  logo- 
machies. They  may  be  explained  away  in  great  part  by  historical 
facts,  and  by  the  accurate  analysis  of  present  conditions.  But  they 
never  will  be  as  long  as  people  cling  to  Eicardo,  and  to  obsolete 
theories  of  an  analogous  kinrl.  *  '  The  instincts  of  men  revolt  against 
a  doctrine  which  teaches  that  a  limited  class  of  property  holders  is 
to  take  an  increased  toll  on  the  earnings  of  capital  and  labour ;  that 
there  is  no  escape  from  this  bondage ;  and  that  the  more  intelligent 
and  acute  labour  becomes,  the  more  heavy  will  be  the  tribute  which 
the  idle  and  worthless  can  exact  from  society.  There  is  no  more 
mischievous  person  living  than  a  rapacious  landlord,  who  uses  to 
the  full  all  the  powers  which  existing  law  gives  him.  But,  on  the 
other  hand,  there  is  no  more  useful  and  deserving  person  than  a  wise 
and  just  landlord,  who  respects  his  neighbour's  true  rights,  while 
he  preserves  his  own.  Unluckily  the  former  are  common,  the  latter 
are  rare.  The  contrast  may  be  extended  into  other  forms  of  pro- 
perty and  other  callings ;  and  the  result  is,  that  the  doctrine  of 
laissezfaire  is  on  its  trial  In  some  quarters,  the  verdict  has  been 
already  given. 

These  lectures  were  compiled  in  1887,  though  some  were 
delivered  in  the  early  part  of  1888.  I  mention  this  in  order  to 
designate  the  date  to  which  some  allusions  in  the  text  refer, 

Oxford, 

June,  188a 


CONTENTS. 


L 

Bias 

THE    ECONOMIC    SIDE    OF    HISTORY  ,  ,  ^  ,  1      ^ 

'    IL       ' 

Y  LEGISLATION  ON  LABOUE  AND  ITS  EFFECTS  •  «  ,23 

HI. 

\J  THE    CULTIVATION   OF   LAND   BY   OWNEBS   AND   OCCUPIEBS    •  •         46 

IV. 

THE   SOCIAL   EFFECT   OF   EELIGIOUa  MOVEMENTS     .  •  •     .    69 

V, 

DIPLOMACY  AND   TBADE    •  •  •  «  •  «         Q2 

VI. 
THE   OHABACTEB   OF  EABLY  TAXATION         •  •  •  •      115 

VIL 

vl    THE      DISTRIBUTION      OF      WEALTH     IN     ENGLAND     AT     DIFFERENT 

EPOCHS        ••••...      188 


xvi  CONTENTS. 

THE   HISTORY   OP   AGRICULTUBAL   BENTS   IN   ENGLAND  a  .160 

IX. 

METALLIC   CUBBENCIES     ••••••      1B3 


PAPEB  CUBBENCIES  *  '.  •  •  o  •      205 

XI. 

THfi   ORIGIN  AND   PBOGEESS   OF   ENGLISH   PAUPEBISM  •  .      227 

XII. 
HISTOBICAL   EFFECTS   OF  HIGH  AND   LOW   PBICES  •  •  .249 

XIII. 

DOMESTIC   MANUFACTURES  .  •  •  •  •      272 

XIV. 
THE   GUILD   AND   APPRENTICE    SYSTEM         *.  •  .  b      296 

XV. 

THE  RISE  AND  PROGRESS  OF  THE  COLONIAL  TRADE      o       .818 

XVI. 

LAISSEZ  FAIRE:  ITS   ORIGIN   AND   HISTORY  .  .  ,      841 

XVII. 

THE     HISTORY    OF     THE     PROTECTIONIST     MOVEMENT     IN     ENGLAND      865 

XVIII. 

THE  INTERPRETATION  OF  EXPORT  AND  IMPORT  TABLES   ,       ,   889 


CONTENTS,  xvu 

XIX. 

PAGE 

THE  ESTATE  OP  THE  CROWN,  AND  THE  DOCTRINE  OP  RESUMPTION   412 

XX. 

PUBLIC   DEBTS     ••••••.      484 

XXL 

THE   THEORY   OP  MODERN  TAXATION  «  .  •  .      456         '^ 

XXII. 

« 

THE    OBJECT    AND    CHARACTER    OF    LOCAL    TAXATION    IN    ENGLAND      479 

XXIII. 

THE     POLICY     OF     GOVERNMENT     IN     UNDERTAKING     SERVICE     AND 

SUPPLY        .••..,#      501 

INDEX  •••«••  AS*      ^25 


EEEATA. 

Page  13  line  14  from  bottom,  /or  friend  read  view. 

13  „  17  „  for  were  read  was. 

15  ,,  16         „  for  three  read  these. 

17  „  17  for  labour,  capital  read  labourer  capitalist. 

25  „  3  for  Lowland  read  Lombard. 

60  „  10  from  bottom,  for  rescue  read  reserve. 

71  „  5         ,,  for  Canosa  read  Canossa. 

73  ,,  14 /or  heighth  read  height. 

74  „  12  after  tenets,  "  of  "  omitted. 
154  „  17 /or  fours  read  four. 
172  „  13  for  persons  read  parcels. 
218  „  11  for  depends  read  depend. 
221  ,,  16  for  even  read  every. 
284  „  14  "  of  "  omitted  at  end  of  line. 
284  „  16 /or  Kitchen  read  Kitchin. 
293  „  7 /or  was  read  were. 
303  „  4  from  bottom,  for  work  read  week. 
309  „  13         „  after  supplied  irwert  *•  and". 
349  „  14  at  end  of  line  "  of  "  omitted. 
462  „  6  from  bottom,  after  distributed,  ivjsert  "if*. 
480  „  11         „           for  waged  read  raged. 


THE   ECONOMIC 
INTERPRETATION    OF    HISTORY. 


THE  ECONOMIC  SIDE  OF  HISTORY. 

Narrow  views  on  history  and  political  economy — The  abundance  of 
materials  —  The  philosophy  of  history  —  Speculative  political 
economy — The  political  influence  of  English  wool  — 1272-1603^ 
and  the  conquest  of  Egypt  by  the  TurJcs^  illustrations  of  the  aid 
given  to  history  by  economical  fadts — Early  English  institutions  in 
parishes  and  towns — ^Self-government  in  the  villages — Famines — 
Labour  and  capital :  their  several  functions — Incider.  ts  of  labour 
and  capital — The  wages  of  labour  and  the  profits  of  capital  iden- 
tical  in  principle — The  Great  Plague  of  1349,  and  the  insurrection 
of  1381, 

In  nearly  all  histories,  and  in  nearly  all  political  economy,  the  col- 
lection and  interpretation  of  economical  facts,  by  -which  I  mean 
such  records  as  illustrate  social  Hfe  and  the  distribution  of  wealth 
at  different  epochs  of  the  history  of  mankind,  have  been  habitually 
neglected.  But  the  neglect  renders  history  inaccurate  or  at  least 
imperfect,  political  economy  a  mere  mental  effort,  perhaps  a  mis- 
chievous illusion.    Every  historian  will  tell  you  that  no  history  is 


2  THE  ECONOMIC  SIDE   OF  HISTORY. 

worth  preserving  which  does  not  at  once  illustrate  the  progress  of  a 

race,  or  a  permanent  influence.     So  a  political  economist  who  does 

not,  in  his  estimate  of  present  industrial  forces  or  agents,  take  into 

account  the  circumstances  which  have  created  or  modified  these 

forces  would,  except  by  a  miracle,  assuredly  blunder  in  his  in- 

^.ferences.    History,  which  does  not  attempt  to  distinguish  the  relative 

importance  of  facts,  and  does  not  inquire  how  any  contemporaneous 

set  of  facts  can  be  pressed  into  the  interpretation,  is  a  mere  disordered 

and  imperfect  dictionary.     Pohtical  economy,  when  it  disdains  the 

,  "correction  of  evidence,  is  a  crude  metaphysic,  which  gives  a  very 

Inartificial  and  en-oneous  account  of  actual  life.     I  hope  to  be  able  to 

illustrate  these  positions  by  numerous  instances. 

I  have  said  that  nearly  all  history,  and  nearly  all  political 
economy,  is  in  this  condition.  But  the  barest  annals  recognize 
some  of  these  facts,  even  when  they  fail  to  interpret  them.  Every 
historian,  for  instance,  notices  the  great  plague  of  the  fourteenth 
century.  He  observes  that  the  English  kings,  in  their  attempts  on 
France,  invariably  strove  to  get  the  Netherlands  on  their  side.  He 
records  the  fact  that  there  was  a  formidable  insurrection  in  England 
in  the  last  quarter  of  the  fourteenth  century,  an  embittered  civil  war 
in  the  fifteenth,  a  serious  weakening  of  Enghsh  reputation  in  the 
sixteenth.  But  these  historians  have  never  attempted  to  discover 
whether  any  economical  facts  contributed  powerfully  to  these 
events.  So  entirely  was  the  seventeenth  century  absorbed  in  the 
great  struggle  of  that  time,  that  it  has  simply  left  unrecorded  all 
facts  of  an  economical  character,  which  in  any  other  country,  even 
the  rudest, 'would  have  arrested  attention.  The  pohtical  history  of 
this  century  has  been  written  over  and  over  again.  Its  social  or 
I  economical  history  has  been  entirely  neglected.  To  the  study  of 
this  aspect  of  history  I  have  given  the  best  years  of  my  life.  I 
hope  in  these  lectures  to  introduce  you  to  some  of  the  facts  and 
some  of  the  inferences  which  I  have  collected,  and  I  think  I  shall 
be  able  to  show  that  very  often  the  cause  of  great  political  events 
and  great  social  movements  is  economical,  and  has  hitherto  been 
undetected. 

By  far  the  largest  amount  of  the  materials  which  I  have  collected 
for  my  purpose  are  from  documents  which  have  probably  never  been 
i:ead  after  the  immediate  object  for  which  they  were  compiled  was 


VIEWS  ON  HI8T0BY  AND  POLITICAL  ECONOMY.        3 

satisfied.  Farming  accounts,  elaborate  accounts  of  buildings  and 
the  materials  purchased  for  their  erection,  with  the  labour  paid  for, 
have  been  examined,  audited,  and  laid  aside.  It  may  be  asked,  Why- 
were  such  documents  preserved  at  all  after  their  use  was  over  ?  The 
answer  is  that,  up  to  recent  times,  the  facts  which  they  recite  might 
be  useful  as  evidence  of  property.  Two  generations  ago  a  title  to 
land  might  be  impugned  or  defended  by  evidence  adduced  on  either 
side  for  six  centuries  and  a  half,  and,  therefore,  all  proof  of  title 
might  be  valuable.  We  owe  the  vast  mass  of  records  preserved  in 
public  and  private  collections  to  a  barbarous  rule  of  law.  It  is 
likely  that  what  prudence  first  dictated  became  a  habit,  and  all 
papers  and  documents  were  preserved  because  it  was  necessary  to 
treasure  some. 

I  do  not  make  my  charges  against  the  historian  and  economist 
without  reason.  At  the  latter  end  of  the  eleventh  century  a  most 
remarkable  document  was  compiled,  a  survey  of  nearly  all  England. 
It  is  rightly  deemed  to  be  one  of  the  choicest  antiquarian  and 
historical  treasures  which  the  nation  possesses.  It  has  long  since 
been  printed.  It  has  frequently  been  examined  for  antiquarian 
purposes.  But  it  has  never  been  analysed.  My  friend,  Professor 
Freeman,  has  published  a  very  copious  history  of  the  Norman  Con- 
quest. He  has,  I  do  not  doubt,  collected  every  scrap  of  history,  in 
the  common  meaning  of  the  word,  which  could  be  procured  from 
every  source,  domestic  and  foreign,  and  commented  on  them  with  a 
fulness  which  is  almost  overwhelming.  But  he  has  made  little  use 
of  Domesday  Book,  which,  after  the  skeleton  of  facts  is  arranged, 
contains  far  more  genuine  living  material  than  all  his  other  au- 
thorities. 

Due  weight  has  been  given  by  some  writers  to  the  habits  and  life 
of  primitive  communities.  But  it  is  to  be  regretted  that  more  atten- 
tion has  not  been  bestowed  on  their  later  development.  The  evidence 
on  this,  in  the  court  rolls  of  manors,  is  exceedingly  abundant  in 
England.  These  documents  are  remarkably  illustrative  of  village  life 
and  of  the  surviving  relics  of  the  communal  system,  and  especially 
of  that  local  self-government  which  has,  perhaps,  been  disadvan- 
tageously  superseded  by  the  later  expedients  of  justices  and  quarter 
sessions.  But  I  should  have  learnt  little  of  the  life  which  our 
ancestors  lived  centuries  ago,  of  the  mutual  liabilities  of  the  villagers, 


4  THE  ECONOMIC  SIDE   OF  HISTORY, 

of  their  local  courts,  and  their  very  effectual  administration  of  justice, 
civil  and  criminal,  if  I  had  not  read  these  manor  rolls  by  hundreds. 
Mr.  Hallam  once  regretted  that  we  could  not  recall  the  life  of  a 
single  medieval  village.  But  the  means  for  doing  so  exists  in 
abundance,  and  the  student  of  these  documents  must  have  a  dull 
imagination  indeed  if  he  cannot  picture  to  himself  the  life  of  an 
Englishman  in  the  days  of  the  Plantagenets  from  his  cradle  to  his 
grave,  realize  all  the  persons  with  whom  he  was  necessarily  brought 
in  contact,  and  give  their  weight  to  all  the  elements  of  the  little 
society  in  which  he  lived. 

Again,  the  materials  for  the  history  of  administration  of  govern- 
ment and  of  finance  are  exceedingly  abundant,  but  have  been  very 
inadequately  pressed  into  the  service  of  the  historian.  England  has 
an  enormous  wealth  of  diplomatic  instruments  ;  not  perhaps  so 
copious  as  the  great  collection  of  Muratori,  or  the  monumental  work 
of  Dumont,  but  still  of  remarkable  fulness.  The  mass  of  financial 
records  is  absolutely  prodigious,  for  the  pipe  rolls  exist  in  an  unbroken 
series  from  the  days  of  the  first  Plantagenet  king  down  to  the  fifth 
of  the  Hanoverian  house.  But  they  are  hardly  explored.  Their 
volume  would,  I  admit,  daunt  the  boldest  student.  But  there  should 
be  nothing  to  prevent  the  historian  from  examining  the  rolls  of 
Parliament.  I  venture  on  asserting  that  if  he  did  so,  he  could 
sweep  away  many  ancient  delusions  as  to  persons  and  events,  delu- 
sions which  seem  to  be  permanently  imbedded  in  the  popular 
histories. 

I  do  not  deny,  I  gladly  acknowledge,  that  the  solid  sfcudy  of  his- 
tory has  made  considerable  progress.  The  narrative  is  no  longer 
merely  one  of  war  and  peace,  of  royal  genealogies,  of  mirelated 
dates,  of  those  annals  about  which  the  adage  was  uttered  that  happy 
is  the  nation  which  has  no  history.  History  has  begun  to  include 
the  study  of  constitutional  antiquities,  though  even  here  there  is  too 
strong  a  tendency  to  anticipate  a  late  development  in  early  begin- 
nings, and  to  lay  too  much  stress  on  doubtful  meanings.  History, 
again,  has  begun  to  recognize  the  progress  of  jurisprudence,  though 
it  has  rarely  recognized  the  economical  conditions  to   which  the 

'    development  of  jurisprudence  was  due.    It  has  touched  lightly,  very 
lightly,  on  social  history,  on  the  condition  of  the  people,  on  the  vary- 

^  ing  fortunes  of  land  and  labour,  and. on  the  circumstances  under 


ABUNDANCE  OF  MATEBIALS.  6 

which  industries  have  been  naturalized  and  developed  amongst  us. 
The  seventeenth  century  is  an  age  of  intellectual  and  politicaf^ 
yiants,  who  carried  on  a  long  and  unbroken  warfare.  It  will  always  ■ 
be  studied.  It  is  the  favourite  topic  or  theme  of  writers.  But  as  it 
has  been  hitherto  written,  it  is  nothing  but  the  record  of  their 
drama,  the  estimate  of  their  characters,  who  were  the  agents  of  this 
colossal  strife.  To  me  the  century  has  another  and  a  very  different 
aspect — the  history  of  the  people,  whose  fortunes  have  hitherto  been 
passed  over  in  silence. 

In  one  direction,  indeed,  history  has  made  great  strides.  I  refer 
to  that  philosophy  which  seeks  to  interpret  the  characters  and 
motives  of  statesmen  and  of  princes,  when  princes  were  statesmen. 
It  is  almost  needless  to  say  that  such  writers,  according  to  the 
vigour  of  their  powers,  are  constantly  open  to  the  charge  of  partisan- 
ship or  paradox.  The  historian  may  be  honestly  convinced  that  he 
is  drawing  a  f  lithful  picture  of  the  men  and  their  times,  and  he 
may  be  as  faithful  as  he  believes  he  is.  But  the  more  vigorous  his 
imagination  is,  the  better  stored  and  more  orderly  it  is,  the  more 
liable  he  is  to  the  charge  of  overcolouring  his  picture,  perhaps  to 
the  risk  of  its  hfe.  Latterly  I  have  been  engaged  in  an  inquiry  into 
the  early  years  of  the  Bank  of  England,  as  I  discovered  some  un- 
known and  unexpected  information  as  to  the  fluctuations  in  the 
price  of  its  stock.  I  had  to  go  for  a  few  years,  with  the  Hmited  pur- 
pose of  illustrating  the  fortunes  of  the  Bank,  over  the  same  ground 
which  Macaulay  had  traversed,  and  to  use  some  of  the  same  au- 
thorities which  he  used.  My  inquiry  was  simply  into  a  new  and 
great  commercial  adventure,  not  into  the  complicated  problem  of 
Bevolution  poUtics.  As  in  duty  bound,  I  bore  testimony,  for  I  had 
proof  before  me,  to  the  cautious  fairness  of  the  historian.  But  a 
friend  of  mine,  a  very  eminent  statesman,  demurred  to  my  eulogy. 
"  The  vast  colouring  power  of  his  fancy,"  he  said,  "  was  against  his  ^ 
accuracy."  .^  -  j 

In  the  philosophy  of  history  it  is  difiBcult  to  avoid  partisanship  ;  | 
impossible,  I  believe,  to  escape  the  imputation  of  it.     The  volcano  j 
may  be  extinct,  the  crust  of  the  lava  may  be  crossed  by  the  way-  I 
farer,  but  deep  in  the  crevices  of  the  cooling  mass  there  may  remain 
a  dull  red  glow.    The  criticism  of  great  men  in  past  times  is  sure  to 
be  interpreted  as  implying  analogies  in  the  present.     The  dispute 


6  THE  ECONOMIC  SIDE  OF  HISTORY. 

about  the  virtues  and  vices  of  Mary  Stuart  is  not  yet  hushed.  The 
reputation  of  Penn  is  still  angrily  defended.  There  are  honest 
apologists  for  Wentworth,  for  Laud,  for  Shaftesbury.  Some  of  you 
Jinow  that  Mr.  Gardiner  has  latterly  shown  not  a  little  skill  in  exhibit- 
ing the  first  two  of  these  historical  personages  in  a  new  hght,  and  even 
of  suggesting  a  fresh  aspect  to  the  great  Parliamentary  struggle.  I 
cannot,  indeed,  quite  accept  the  ingenious  inferences  of  this  able 
writer.  I  do  not  want  indeed  to  be  told  that  Wentworth  was  not  a 
mere  adventurer.  I  do  not  take  my  estimate  of  him  from  Baillie 
or  Clarendon.  I  do  not  want  to  be  told  that  Laud  was  not  a  mere 
driveller.  I  do  not  get  my  opinion  of  him  from  the  coarse  invec- 
tives of  Prynne  or  the  coarse  eulogies  of  HeyUn.  Nor  has  Mr. 
Christie  removed  my  suspicions,  well-founded  suspicions  I  believe, 
as  to  the  motives  and  character  of  Shaftesbury.  Still,  it  is  some- 
thing that  in  the  days  of  the  second  Charles  a  man  could  have  held 
ofifice  under  the  Crown  without  becoming  portentously  and  indispu- 
tably wicked.  I  could  multiply  these  illustrations.  I  will  only  add 
that,  as  great  historians  of  the  philosophic  school  can  hardly  escape 
the  imputation  of  partisanship,  so  the  meaner  masters  of  the  craft 
almost  invariably  fall  into  transparent  paradox  and  grotesque 
exaggeration.  There  is  a  further  stage,  in  which  an  attempt  is 
made  to  draw  a  likeness,  and  the  failure  is  complete.  I  cannot 
accept  Lord  Stanhope's  portrait  of  anybody. 

^  The  student  of  history  who  attempts  the  less  ambitious  but  more 
laborious  task  of  economical  interpretation  occupies  a  safer,  a  more 
unchallengeable  position.  If  I  can  point  out  to  you  that  the  price 
of  wheat  rose  frequently,  in  the  first  half  of  the  seventeenth  cen- 
tury, to  55s.  and  more  a  quarter,  and  that  the  peasant's  wages  were 
forcibly  kept  down,  by  the  best  expedient  that  the  administration 
could  devise,  to  less  than  sixpence  a  day,  I  am  not  concerned  at 
he  criticism  of  those  who  would  deny  that  this  was  oppression. 
If  I  can  show  you  that  agricultural  land  let  a  generation  ago  at  ten 
times  the  amount  which  it  let  at  in  the  same  first  half  of  the  seven- 
teenth century,  I  shall  not  be  deterred  by  a  legion  of  Ricardos,  into 
expressing  the  gravest  doubts  as  to  whether  that  eminent  person 
gave  an  exhaustive  account  of  the  rent  of  land.     Such  corrections 

\    of  popular  political  economy  have  constantly  come  before  me. 
^'^    The  poHtical  economist  of  the  later  school  has  thoroughly  carried 


TEE  PHILOSOPHY  OF  HISTORY,  7 

out  in  his  own  person  the  economical  law  which  he  sees  to  be  at 
the  bottom  of  all  indjistrial  progress  ;  that  of  obtaining  the  largest 
possible  result  at  the  least  possible  cost  of  labour.  He  has,  there- 
fore, rarely  been  at  the  pains  of  verifying  his  conclusions  by  the 
evidence  of  facts.  He  has,  therefore,  constantly  exalted  into  the 
domain  of  natural  law,  what  is  after  all,  and  at  the  best,  a  very 
dubious  tendency,  and  may  be  a  perfectly  baseless  hypothesis.  Hia 
conclusions  have  been  rejected  by  workmen,  and  flouted  by  statesmen. 
The  former  have  accused  him  of  partisanship,  the  latter  of  unreaUty. 
He  is  not  infrequently  inconsistent  with  himself  and  his  own  theory. 
In  one  page  he  insists  on  the  intrinsic  wisdom  of  free  competition, 
in  another  he  accords  the  privilege  of  protection  to  young  and  rising 
communities.  One  of  the  less  judicious  of  these  writers  may 
advocate,  nay,  has  advocated,  a  regulated  issue  of  notes  under  one 
set  of  circumstances,  and  counselled  the  discretionary  issue  of 
paper  money  at  another,  when  the  latter  situation  was  wholly 
indefensible.  Men  have  written  about  the  "law  of  diminishing"* 
returns,"  without  having  given  a  moment's  attention  to  the  practice 
of  agriculture,  and  getting  a  fraction  of  the  experience  which  may 
be  derived  from  witnessing  that  practice,  and  have  rated  the 
British  workman  for  improvidence  and  recklessness,  without  having 
troubled  themselves  to  discover  the  very  traceable  historical  causes 
which  have  induced  that  character  on  him.  Perhaps  the  most 
remarkable  Nemesis  which  has  come  on  the  speculative  economist 
is  that  the  definition  of  Population  by  Malthus,  and  the  definition 
of  Kent  by  Kicardo,  have  been  made  the  keystone  to  Mr.  Henry 
George's  theory,  under  which  he  demands  the  confiscation  of  Eent 
in  the  interests  of  Population.  "' 

The  truth,  when  the  economist  has  tested,  and  as  far  as  possible  '- 
verified  his  inferences  or  hypothesis  by  the  evidence  of  facts,  he 
may  be  able  to  predict.  His  predictions  may  be  exceedingly 
accurate,  and  may  be  exceedingly  alarming.  He  may  show,  for 
example,  by  a  study  of  the  conditions  under  which  agricultural  rent  ^/ 
has  been  developed  and  increased  in  this  country,  that  a  revival  of 
agricultural  rent,  unless  the  conditions  of  occupancy  are  wholly 
altered,  either  by  the  spontaneous  and  reawakened  intelligence  of 
the  landowners,  or  by  the  operation  of  law,  in  the  probable  absence 
of  such  intelligence,  is  not  only  unlikely,  but  that  matters  will  go 


8  THE  ECONOMIC  8IDE   OF  EI8T0RT. 

on  from  bad  to  worse,  without  any  visible  hope  of  recovery.  The 
economist  has  satisfied  his  function  when  he  has  justified  his  pre- 
diction. Then  begins  the  position  of  the  statesman,  whose  duty  it 
is  to  say,  and  that  speedily  and  peremptorily,  "  What  you  say  and 
prove  will  happen,  must  not  happen,  but  law  must  be  invoked,  if 
obstinacy  and  stupidity  requires  its  intervention."  The  student  of 
the  conditions  of  health  alleges,  and  with  perfect  truth,  that  given 
such  and  such  circumstance,  disease  and  loss  of  life  are  inevitable. 
The  statesman  gives  effect  to  his  demonstration  by  passing  sanitary 
laws,  and  enforcing  their  satisfaction. 

The  wise  habit  of  developing  inferences  from  evidence  has  been 
cultivated  by  at  least  one  modem  writer.  The  range  of  Mr.  Giffen's 
speculations  is  not  wide,  and  in  some  investigations  which  he  has 
made,  he  has  not,  I  am  confident,  gone  far  enough  back  in  his 
researches.  But  in  those  which  bear  on  monetary  science  and  trade, 
his  method  leaves  nothing  to  be  desired^  and  the  student,  who 
is  anxious  to  go  beyond  the  common  chatter  of  text-books  and 
manuals,  will  learn  more  and  better  political  economy  from  Mr. 
Giffen's  essays  than  he  would  if  he  browsed  for  ever  on  the  thorns 
and  thistles  of  abstract  political  economy.  I  commend,  in  par- 
ticular, to  your  notice,  the  essays  contained  in  the  second  series. 

I  will  now  proceed  to  show  by  way  of  illustration  how 
economical  facts  lend  themselves  to  the  interpretation  of  history.  I 
stated  just  now  that  the  Plantagenet  kings  always  used  Flanders 
as  the  fulcrum  from  which  to  make  their  attacks  on  France,  and 
that  our  Edward  IIL  and  Henry  V.  sedulously  cultivated  the 
friendship  of  the  Flemings  and  their  rulers.  The  means  which 
they  employed  to  further  these  diplomatic  ends,  was  the  free  or 
restrained  exportation  of  English  wool.  From  the  thirteenth  to 
the  sixteenth  century,  "  wool  was  king."  A  quarter  of  a  century 
ago,  the  seceding  states  of  the  American  Union  avowed  that  "  cotton 
,,  was  king,"  and  that  a  stint  of  this  necessary  material  of  British 
industry  would  assuredly  effect  a  diplomatic  revolution  in  England, 
enforce  the  acknowledgment  of  Southern  independence,  and  con- 
strain the  inhabitants  of  the  United  Kingdom  to  reconsider  their 
hatred  of  slavery.  The  cessation  of  a  cotton  supply  induced  great 
misery,  but,  for  reasons  which  will  appear  further  on,  the  partisans 
of  the  South  erred  in  their  reckoning. 


THE  POLITICAL  INFLUENCE  OF  ENGLISH  WOOL.       9 

England  was  the  only  wool-producing  country  in  Europe.  To  ^ 
some  extent,  tliis  remarkable  industrial  phenomenon  is  due  to  its 
climate  and  soil,  though  some  parts  of  England  are,  and  have  been 
for  centuries,  more  fitted  for  this  product  than  others.  In  a 
petition  to  parliament  presented  in  1454,  it  is  suggested  that  certain 
kinds  of  wool,  forty-four  in  number,  should  not  be  exported,  except 
at  the  prices  named  in  the  schedule.  These  prices  range  from  260s. 
the  sack,  the  value  assigned  to  a  certain  kind  of  Hereford  wool,  to 
62s.,  that  assigned  to  Suffolk  produce.  These  are,  beyond  doubt, 
to  use  a  modem  phrase,  brands  well  known  in  the  wool  trade  of  the 
time.  More  than  a  century  Jjefore  this  time,  permission  wfts  given 
to  export  wool  in  certain  quantities  at  certain  prices,  the  prices  not 
being  quite  so  high  as  those  in  the  schedule  of  1454.  It  is  possible 
that  the  object  of  the  petition  was  to  encourage  the  Enghsh  cloth 
trade,  it  is  equally  probable  that  it  was  intended,  had  the  prayer 
been  granted,  to  force  the  Flemings  into  active  co-operation  with 
those  designs  on  France  which  had  been  so  disastrously  disap- 
pointed the  year  before,  when  Shrewsbury  had  been  defeated  and 
slain  at  Chatillon. 

The  practical  monopoly  which  the  English  possessed  of  the  wool  ' 
supply  was  less  due  to  the  climate  and  soil  of  England,  than  it  was 
to  the  maintenance  of  order  in  the  kingdom.  For  a  long  time, 
every  one  in  England,  from  the  king  to  the  serf,  was  an  agriculturist. 
After  the  landowners  had  been  constramed  to  give  up  arable 
farming,  they  still  remained  sheep  masters,  produced  wool  and  sold 
it.  Now  when,  owing  to  the  diffusion  or  distribution  of  property, 
every  one  is  interested  in  maintaining  the  rights  of  property,  there 
is  very  little  temptation  given  to  theft  or  violence,  and  every  incli- 
nation to  detect  and  punish  it.  Hence  Englishmen  could  keep 
sheep,  the  most  defenceless  of  agricultural  animals.  Every  one 
who  knows  anything  about  the  state  of  Western  Europe  from  the 
thirteenth  to  the  seventeenth  century,  knows  that  the  husbandman 
did  not  keep  sheep,  for;  they)  would  have  certainly  been  plundered 
of  them  by  the  nobles  and  their  retainers  if  they  had.  The  king's 
peace  was  the  protection  of  the  sheep  master.  ^ 

England  then  had  a  monopoly  of  wool.     The  monopoly  was  so     ^ 
complete,  and  the  demand  for  the  produce  so  urgent,  that  the 
EngUsh  Parliaments  were  able  to  grant  an  export  duty  on  "wool 


10  THE  ECONOMIC  SIDE   OF  BISTORT. 

equal  to  more  than  the  market  value  of  the  produce  without 
diminishing  its  price.  In  other  words,  the  export  duty  was  paid  by 
the  foreign  consumer,  a  financial  success  which  every  government 
;  Jias  desired,  which  many  governments  have  tried,  and  in  which  all, 
with  this  English  exception,  have  failed.  The  reason  is,  that  in 
order  that  an  export  duty  should  be  paid  by  the  foreign  consumer, 
four  conditions,  very  rarely  satisfied,  have  to  be  in  existence  :  1.  The 
article  must  be  a  necessary  of  life.  2.  There  must  be  absolutely 
.^no  other  source  of  supply,  except  the  country  from  which  it  is 
'  derived.  8.  There  must  be  no  substitute  for  the  article  in  question. 
-4.  There  must  be  no  appreciable  economy  possible  in  the  use  of  it. 
These  conditions  were  satisfied  in  the  case  of  English  wool  during 
the  period  that  it  was  so  powerful  a  diplomatic  force.  During  the 
course  of  my  economic  studies,  I  have  not  seen  them  satisfied  in 
any  other  commodity  whatever,  and  I  submit  that  this  aspect  of 
the  relation  of  England  to  Flanders  and  its  rulers,  is  incomparably 
more  instructive  than  the  pedigree  of  the  Dukes  of  Burgmidy,  or 
the  barren  account  of  military  operations  on  the  French  frontier  of 
the  Low  Countries.  The  best  wool  in  England  was  worth  20s. 
a  tod  in  the  fifteenth  century,  i.e.,  about  four  quarters  of  wheat. 
Three  centuries  later,  when  other  prices  had  risen  from  nine  to 
twelve  times,  English  wool  of  excellent  quality  was  sold  at  less 
than  half  the  sum  which  it  had  been  appraised  at  in  the  period 

i   which  I  have  taken  for  illustration. 

1       I  will  take  another  example  by  way  of  proving  to  you  how  much 

I  the  interpretation  of  history  gains  by  the  study  of  economic  facts. 

^  In  the  twelfth  and  thirteenth  centuries  there  were  numerous  and 
\  well-frequented  .routes  from  the  markets  of  Hindostan  to  the 
Western  world,  and  for  the  conveyance  of  that  Eastern  produce 
which  was  so  greatly  desired  as  a  seasoning  to  the  coarse  and  often 
unwholesome  diet  of  our  forefathers.  The  principal  ports  to  which 
this  produce  was  conveyed  were  Seleucia  (latterly  called  Licia)  in 
the  Levant,  to  Trebizond  on  the  Black  Sea,  and  to  Alexandria. 
From  these  ports  this  Eastern  produce  was  collected  mainly  by  the 
Venetian  and  Genoese  traders,  and  conveyed  over  the  passes  of  the 
Alps  to  the  Upper  Danube  and  the  Kbine.  Here  it  was  a  source  of 
great  wealth  to  the  cities  which  were  planted  on  these  waterways, 
from  Ratisbon  and  Nurenberg,  to  Burges  and  Antwerp.    The  stream 


THE  CONQUEST  OF  EGYPT  BY  THE  TUBES.  11 

of  commerce  was  not  deep  or  broad,  but  it  was  singularly  fertilizing, 
and  every  one  who  has  any  knowledge  of  the  only  history  worth 
knowing,  knows  how  important  these  cities  were  in  the  later 
Middle  Ages. 

In  course  of  time,  all  but  one  of  these  routes  had  been  blocked 
by  the  savages  who  desolated  Central  Asia,  and  still  desolate  it ; 
the  most  hateful  and  mischievous  of  these  races  being  still  en- 
camped in  what  was  once  the  most  prosperous  part  of  the  world, 
Greece  and  Asia  Minor,  and  keeping  it  in  hopeless  savagery.  It 
was,  therefore,  the  object  of  the  most  enterprising  of  the  Western 
nations  to  get,  if  possible,  in  the  rear  of  these  destructive  brigands, 
by  discovering  a  long  sea  passage  to  Hindostan.  All  Eastern  trade 
depended  on  the  Egyptian  road  bemg  kept  open,  and  this  remaining 
road  was  early  threatened.  The  beginning  of  this  discovery  was 
the  work  of  a  Portuguese  prince/  The  expedition  of  Columbus  was 
an  attempt  to  discover  a  passage  to  India  over  the  Western  sea.  By 
a  curious  coincidence,  the  Cape  Passage  was  doubled,  and  the  New 
World  was  discovered,  almost  simultaneously. 

These  discoveries  were  made  none  too  soon.  Selim  I.  (1512-20), 
the  Sultan  of  Turkey,  conquered  Mesopotamia  and  the  holy  towns 
of  Arabia  and  annexed  Egypt  during  his  brief  reign.  This  con- 
quest blocked  the  only  remaining  road  which  the  Old  World  knew. 
The  thriving  manufactures  of  Alexandria  were  at  once  destroyed. 
Egj^t  ceased  to  be  the  highway  from  Hindostan.  Sehm  had  all 
the  energy  of  the  race  to  which  he  belonged,  and  more  than  all  of 
its  vices.  I  discovered  that  some  cause  must  be  at  work  which  had 
been  hitherto  unsuspected,  in  the  sudden  and  enormous  rise  of  price 
in  all  Eastern  products,  at  the  close  of  the  first  quarter  of  the  six- 
teenth century,  and  found  that  it  must  ha^e  come  from  the  conquest 
of  Egypt.  \ 

The  river  of  commerce  was  speedily  dried  up.  The  cities  which 
had  thriven  on  it  were  gradually  ruined,  at  least  in  so  far  as  this 
source  of  their  wealth  was  concerned.  The  Nile  became  fiamen 
epotum  Medo  in  a  commercial  sense,  and  the  trade  of  the  Danube 
and  the  Khine  ceased.  The  ItaUan  cities  fell  into  rapid  decay.  The 
German  nobles,  who  had  got  themselves  incorporated  among  the 
burghers  of  the  free  cities,  were  impoverished,  and  betook  themselves 
to  the  obvious  expedient  of  reimbursing  their  losses  by  the  pillage 


12  THE  ECONOMIC  SIDE   OF  BISTORT. 

of  their  tenants.  Then  came  the  Peasants'  War,  its  ferocious  inci- 
dents, its  cruel  suppression,  and  the  development  oi  those  wild  sects 
which  disfigured  and  arrested  the  German  Eeformation.  The  hattle 
of  the  Pyramids,  in  which  Selim  gained  the  Sultanate  of  Egypt  for 
the  Osmanli  Turks,  brought  loss  and  misery  into  thousands  of  homes 
where  the  event  had  never  been  heard  of.  It  is  such  facts  as  these 
which  the  economic  interpretation  of  history  illustrates  and  expounds. 
I  shall  have  occasion  in  the  course  of  these  lectures,  to  supply  you 
with  a  multitude  of  examples  as  significant  as  these  two  which  I 
have  quoted.  I  am  not,  I  hope,  too  much  absorbed  in  the  study 
which  I  have  pursued  for  so  many  years,  as  to  overvalue  the  facts 
which  I  have  discovered  and  marshalled.  But  I  am  convinced  that 
to  omit  or  neglect  these  economical  facts  is  to  make  the  study  of 
history  barren,  and  its  annals  unreal.  With  every  effort  that  can 
be  given  to  it,  the  narrative  of  the  historian  can  never  be  much 
more  than  an  imperfect  or  suggestive  sketch.  We  may  get  the 
chronology  correct,  the  sequence  of  events  exact,  the  details  of  cam- 
paigns precise,  the  changes  of  frontier  reasonably  accurate,  but  may 
still  be  far  off  from  the  controlling  motives  of  public  action,  may  be 
entirely  in  the  dark  as  to  the  real  causes  of  events.  Nor  shall  we 
be  greatly  helped  by  the  more  or  less  successful  criticism  of  the 
career  and  purposes  of  public  men.  During  the  great  drama  of  the 
wars  of  religion,  we  may  make  a  more  or  less  intelligent  estimate 
of  Phihp  II.  and  WiUiam  of  Orange,  of  Henry  of  Navarre  and 
Elizabeth  of  England,  of  Maurice,  Barneveldt,  Eichelieu,  Bucking- 
ham, of  the  English  Puritans^  of  Laud  and  Strafford,  of  Eliot,  Pym, 
Hampden,  Falkland,  Cromwell,  of  Ferdinand  of  Styria,  Maximihan 
(5f  Bavaria,  Gustavus  Adolphus,  and  Wallenstein ;  but  we  shall  never, 
with  all  our  pains,  obviate  the  revision  of  our  judgments.  But  when 
we  have  economical  facts  of  great  and  far-reaching  import  to  guide 
us,  we  can  arrive  at  conclusions  which  cannot  be  modifi.ed,  because 
they  cannot  be  disputed.  I  shall  not  pretend  to  say  that  I  have 
discovered  the  meaning  of  many  among  the  facts  which  I  have 
collected.  It  has  been  always  my  opinion,  an  opinion  which  I 
have  constantly  avowed,  that  my  researches  will  very  possibly  yield 
in  other  hands  more  than  I  have  been  able  to  infer,  and  will  serve 
to  illustrate  and  interpret  the  past  and  present  to  a  greater  extent 
than  I  have  been  or  shall  be  able  to  effect. 


EABLY  ENGLISH  INSTITUTIONS,  18 

I  mentioned  in  an  early  part  of  this  lecture,  that  Hallam  had 
lamented  the  disappearance  of  the  annals  of  the  poor,  the  recovery 
of  which  would  throw  so  much  light  on  the  past.  This  excellent, 
laborious,  and  conscientious  writer,  whose  works  are  more  profitably 
studied  than  others  of  more  antiquarian  pretensions,  derived  all  his 
information  from  printed  books.  His  powers  of  inference  and  his- 
torical construction  were  therefore  limited  by  his  materials,  and 
none  of  the  writers  which  he  consulted,  with  the  exception  of  Madox, 
had  drawn  information  from  original  documents.  Madox,  too, 
appears  to  have  consulted  very  little  beyond  some  of  the  Pipe  rolls, 
and  those  cursorily.  There  were  printed  authorities,  such  as  FitZ' 
herbert's  treatises,  from  which  Hallam  might  have  gathered  much. 

Some  English  institutions  have  had  a  most  tenacious  existence. 
It  has  been  observed  that  the  vestry  or  parish  meeting  is  in  direct 
succession  from  the  assembly  of  freemen  in  the  Teutonic  mark. 
The  system  of  grand  and  petty  juries  had  their  beginning  in  the 
presentments  of  the  minor  courts,  and  the  levy  of  fines,  sometimes 
of  the  highest  penalties,  on  ofifenders.  The  penalties  of  treason  are 
copied  from  the  punishments  inflicted  on  offenders  against  the 
sanctity  of  the  mark  and  its  boundaries.  The  peculiar  position  of 
the  steward  or  seneschal  of  the  manor,  when  he  sat  on  the  judgment 
seat  wore  similar  to,  and  a  precedent  for,  the  circuits  and  authority 
of  the  judges  of  assize.  The  perambulation  of  the  boundaries  and 
the  attendance  of  the  boys  at  this  ceremony  seems  to  be  the  survival 
of  the  momioi  frank  pledge  and  registration  in  the  decenna.  The 
taxing  rolls  of  the  Plantagenets,  in  which  the  owners  of  all  personal 
property  in  the  several  parishes  are  named,  would  with  a  httle  care 
serve  as  a  census  of  the  parishes  at  the  time  when  the  assessors 
visited  the  inhabitants. , 

The  parish  held  from  thirty  to  one  hundred  inhabitants  or  more. 
It  contained  one  or  two  lords  of  manors,  for  sometimes  the  parish 
was  divided  among  two  or  more  overlords.  This  lord  was  frequently 
non-resident,  and  only  visited  his  domain  and  tenants  occasionally. 
The  most  important  functionary  was  the  rector  or  parson,  practically 
the  head  man  of  the  village,  and  when  the  lord  or  steward  were  not 
holding  court,  the  permanent  chairman  of  the  village  gatherings. 
If  his  tithes  had  not  been  appropriated  by  some  monastery,  his 
income  derived  from  these  and  from  offerings  and  dues,  ordinary 


14  TEE  ECONOMIC  SIDE   OF  HISTORY. 

and  extraordinary,  was  for  the  time  considerable,  and  it  was  common 
for  him  to  select,  educate,  train,  and  send  to  the  university  some 
bright  and  intelligent  village  lad,  even  though  he  might  be  of 
servile  birth,  in  order  that  he  might  become  a  priest.  In  the  same 
way,  without  regard  to  his  origin,  an  ambitious  and  courageous 
youth  might  enter  the  king's  army;  and  the  former  might  become  a 
learned  doctor  and  bishop,  as  Grostete  became,  the  latter  a  captain 
and  knight,  as  Sale  did,  both  having  been  of  mean  birth. 

The  houses  of  the  villagers,  built  of  wattles,  smeared  inside  and 
out  with  mud  or  clay,  were  crowded  near  the  church,  in  the  street 
of  the  settlement,  though  there  were  in  large  parishes,  outlying 
homesteads.  In  all  cases  the  church  was  the  common  hall  of  the 
parish,  and  a  fortress  in  time  of  danger,  occupying  the  site  of  the 
stockade  which  had  been  built  when  the  first  settlers  occupied  the 
ground.  In  the  body  of  the  church  were  frequently  stored  produce, 
corn  and  wool  Here  too,  I  believe,  the  common  feasts  of  the 
parish  were  held,  till  such  time  as  the  proceeds  from  the  local  guild 
enabled  the  people  to  erect  their  own  guild-house.  The  only  houses 
of  any  pretension  in  the  village  were  the  lord's,  the  parson's,  and 
the  miller's,  who  by  prescription  took  toll  of  all  the  inhabitants,  who 
were  bound  to  grind  at  his  mill,  who  is  a  busy,  and  according  to 
current  report,  not  an  over-scrupulous  personage  in  his  dealings 
with  his  fellow  villagers. 

Most  of  the  villagers  held  latid  as  freeholders  under  fixed  rents, 
and  copyholders  under  no  less  fixed  services.  The  arable  land  was 
in  open  fields,  strips  of  which,  divided  by  balks  on  which  the  grass 
was  left  growing,  were,  in  greater  or  less  quantity,  the  property  of 
the  lord,  the  parson,  and  the  tenants.  When  the  scanty  harvest 
was  gathered,  the  arable  land  became  for  a  time  common  pasture. 
Beside  these  fields  were  the  commons,  the  lord's  waste,  and  the 
lord's  wood,  the  latter  being  generally  on  the  village  bounds.  Some 
of  the  villagers  had  only  cottages  with  curtilages,  and  were  the 
hired  labourers  in  husbandry ;  though  the  small  farmer,  when  his 
work  on  his  small  holding  was  done,  was  ready  to  better  himself  by 
taking  work.  All,  as  I  have  said,  paid  rent,  in  money,  in  kind,  or  in 
labour;  but  in  the  historical  period,  the  labour,  rents,  and  ultimately 
the  rents  in  kind  were  always  commutable  for  money,  the  money 
equivalent'  being  always  less  than  the  ordinary  rate  of  wages. 


SELF'GOVEBNMENT  IN  THE  VILLAGE,  15 

Beyond  their  agricultural  labours,  the  villagers  met  informally  in 
council,  under  the  presidency  of  the  rector,  and  formally  at  the 
times,  generally  three  times  a  year,  when  the  lord's  courts  were 
held.  In  these  courts  they  were  trained  in  habits  of  seK-govern- 
ment,  some  presenting  offenders,  some  sitting  as  a  jury  of  com- 
purgators. For  in  early  times,  at  least,  it  seems  that  no  stranger 
could  be  harboured  in  the  settlement,  a  breach  of  the  rule  beyond 
a  certain  time  being  punishable  with  a  fine.  Most  villages  of  any 
.size  had  an  annual  fair.  Then  there  were  markets  and  fairs  in 
other  towns.  The  earhest  writer  on  English  husbandry,  Walter  de 
Henley,  allows  several  days  for  periodical  visits  to  these  places  of 
business  and  pleasure.  Few  parishes  were  probably  without  guild 
lands  from  which  the  aged  and  the  poor  were  nourished,  till,  on  the 
plea  that  they  were  devoted  to  superstitous  uses,  they  were  stolen, 
under  an  Act  of  Parhament,  by  Protector  Somerset. 

The  surroundings  of  these  villagers'  houses  were  unclean  and 
unwholesome,  just  as  they  are  near  an  Irish  cottier's  house  in  our 
own  time,  and  it  was  the  lord's  interest  to  encourage  the  drain  from 
the  cottager's  middens  over  his  own  meadows,  which  generally  lay 
near  the  village  stream.  Perhaps  the  life  of  a  mediaeval  Englishman 
was  less  uneventful  than  that  of  the  modern  peasant.  He  had  to 
get  all  that  he  wanted,  beyond  what  he  procured  by  his  own  labour, 
for  himself  and  his  family,  at  ^njof  periodical  fairs,  or  less  ad- 
vantageously at  the  shops  of  the  few  and  small  towns  which  he  was 
able  to  frequent.  Here  he  sold  his  surplus  produce,  in  order  to*pay 
bis  dues,  and  to  get  what  he  needed  for  farm  and  homestead. 
Apart  from  these  periodical  absences  from  home,  he  learnt  the  news 
from  the  numerous  itinerant  priests  who  constantly  visited  the 
villages.  In  later  times,  if  he  sympathized  with  Wiklif  and  his 
poor  priests^  he  would  take  counsel  with  these  migratory  preachers, 
confide  in  them  his  troubles  and  discontents,  and  even  concert  with 
them  the  means  of  armed  resistance,  resistance  which  once  nearly 
shook  England  to  its  foundations. 

The  essence  of  contracts  for  the  occupation  of  land,  if  these 
ancient  tenures  could  be  called  contracts,  was  that  the  liabilities  of 
the  tenant  should  be  fixed  and  unchangeable.  This  idea  of  a  fixed 
rent  in  an  estate  of  inheritance  pervaded  all  relations  of  landlord 
and  vassal.    It  affected  the  subsidies  granted  to  the  Crawn,  the 


16  THE  EGONOMIG  SIDE   OF  HISTORT. 

county  valuations  of  which  appear  to  have  been  unchanged  from 
the  days  of  the  Plantagenets  to  the  days  of  the  Stuarts,  So  with 
the  fee  farm  rents  paid  by  freeholders,  the  labour,  and  subsequently 
the  commuted  rents  paid  by  the  copyholders.  The  principle  that  a 
tax  should  be  unchanged  was  adopted  in  William  III.  land  tax, 
an  assessment  which  has  never  been  revised  after  the  lapse  of  nearly 
two  centuries.  So  in  arguing  in  the  House  of  Commons,  in  1881, 
in  favour  of  a  produce  rent  in  Ireland,  which  the  expectants  of  the 
unearned  increment  refused  to  accept,  I  ventured  on  predicting  that 
an  arbitrated  money  rent,  that  which  the  House  of  Commons  ulti- 
mately adopted,  would  never  be  raised,  but  might  be  diminished. 
Time  has  shown  that  my  prediction  is  verified. 

I  believe,  indeed,  that  under  ordinary  circumstances  the  means 
of  life  were  more  abundant  during  the  Middle  Ages  than  they  are 
under  our  modern  experience.  There  was,  I  am  convinced,  no 
extreme  poverty.  His  dues  paid,  the  small  farmer's  property  and 
profits  were  as  secure  as  the  landlord's  domain.  In  this  the  condi- 
tion of  the  English  pea^g-nt  was  in  marked  contrast  to  the  lot  of  the 
French  roturier  and  the  Teutonic  bauer.  There  was  but  a  small 
surplus  population  quartered  on  the  products  of  the  soil.  The 
labour  of  the  husbandman  was  not  constrained,  as  in  later  times, 
to  support  a  mass  of  idlers  and  consumers.  But  in  other  respects 
bis  condition  was  far  less  satisfactory.  His  diet,  owing  to  the  lack 
of  winter  food  and  nearly  all  vegetables,  was  unwholesome  during 
half  the  year,  when  he  was  constrained  to  live  on  salt  provisions. 
Leprosy  and  scurvy  were  common  diseases  in  mediaeval  England. 
In  the  fourteenth  century  it  is  probable  that  life  was  healthier  in 
the  towns  than  it  was  in  the  country.  In  the  seventeenth  these 
conditions  were  reversed.  In  healthy  seasons  the  death  rate  in 
London  was  41^  per  thousand,  in  unhealthy  times  the  deaths  were 
double  the  births.  In  this  same  century,  the  deaths  in  country 
places  were  calculated  at  29  in  the  thousand. 

England  suffered  from  occasional  famines.  Of  these  by  far  the 
most  formidable  were  the  harvest  failures  of  1315,  1316,  and  1321, 
when  incessant  rain  in  summer  destroyed  the  crop,  as  incessant 
rain  always  does.  It  would  seem  that  at  this  time  there  must  have 
been  a  considerable  loss  of  human  life.  This  is  told  us,  indeed,  by 
the  chroniclers  of  the  age,  but  there  is  a  stronger  proof  than  their 


FAMINES.    LABOUR  AND  CAPITAL,  17 

narrative  supplies,  for  the  rate  of  wages  rose  10  per  cent,  after  the 
occurrence  of  the  calamity.  In  this  case,  and  in  the  far  graver 
events  which  followed  on  the  pestilence  of  1849,  the  greatest 
increase  was  effected  in  what  was  previously  the  worst  paid  kind  of 
labour,  as,  for  instance,  threshing  oats  and  women's  labour,  for  it 
is  a  law  of  prices  which  I  have  constantly  verified  by  an  examina- 
tion of  facts  that,  whenever  a  scarcity  occurs  in  any  necessary  agent 
or  product,  the  rise  among  the  severally  related  forms  of  the  service 
or  product  is  always  greatest  in  that  which  had  hitherto  been  the 
lowest.  Thus,  in  materials,  when  a  scarcity  occurred  a  quarter  of  a 
century  ago  in  cotton,  Surat  produce  rose  vastly  more  than  Sea 
Island  did.  Thus,  after  the  pla^gue  to  which  I  have  just  referred, 
the  rise  in  the  cost  of  threshing  wheat  was  38  per  cent.,  of  oats 
88  per  cent.,  while  women's  labour  was  paid  double  or  treble  its 
old  prices. 

It  may  assist  us  in  illustrating  the  facts  which  will  perpetually 
occur  in  dealing  with  economic  history,  if  I  state  briefly  what  are 
the  relations  of  the  laboui^aiid  the  capitalMWealth  is  of  two  kinds, 
passive  or  unproductive,  and  active  or  productive,  the  former  being 
constantly  and  regularly  a  reserve  on  which  the  latter  may  draw 
This  double  function  of  wealth  explains  the  rapidity  with  which  in 
times  of  exalted  demand  wealth  is  readily  turned  into  the  active 
form,  profits  increase,  workmen  are  employed,  and  finally  wages 
rise.  Mr.  Mill  has  alleged,  and  no  douht  has  puzzled  you  greatly 
by  the  allegation,  that  demand  for  commodities  is  not  a  demand  for 
labour,  a  statement  which  contravenes  all  experience.  Mr.  Mill's 
error,  and  an  error  he  acknowledged  this  famous  paradox  to  be  in  the 
later  years  of  his  life,  arose  from  his  believing  that  wealth  destined 
to  active  uses  was  at  any  given  time  a  fixed  quantity,  just  as  at  any 
given  time  a  balance  at  a  banker's  is.  But,  in  point  of  fact,  the 
wealth  available  at  any  given  time  for  the  purpose  of  affording  con- 
tinuity to  industry  is  a  very  indefinite  quantity,  is  capable  of 
great  and  sudden  extension,  especially  in  the  form  of  loanable 
wealth. 

The  function  of  capital  is  to  secure  the  continuous  employment  T 
of  labour,  and  as  far  as  possible  to  equalise  prices  and  profits.    The  ^ 
labourer  lends  his  labour  for  a  week  or  a  fortnight,  or  longer,  to  the 
employer,  and  it  is  easy  to  conceive,  when  a  turnover  is  rapid,  that 

8 


18  THE  ECONOMIC  SIDE   OF  BISTORT. 

the  employer  has  secured  bis  profit  long  before  be  repays  bis  work- 
men for  the  advance  which  the  latter  has  made  to  him.  In  the 
great  majority  of  cases,  however,  the  profit  of  the  employer  is  post- 
poned till  long  after  be  has  repaid  his  workman.  But  the  principal 
service  which  the  employer  does  is  to  give  the  labourer  the  prospect 
of  continuous  employment,  and  as  the  division  of  employments  is 
developed,  and  human  labour  is  aided,  or  perhaps  displaced,  by 
costly  machinery,  the  ^pediency  of  finding  continuous  employment 
for  labour  is  stimulated  by  the  knowledge  that  the  cessation  of 
employment  would  be  a  rapidly  growing  loss.  Again,  it  is  the 
business  of  the  capitalist  employer  to  maintain  as  far  as  possible  an 
equal  money  value  or  price.  The  most  violent  fluctuations  of  price 
occur  when  the  producer  is  constrained  to  sell  at  the  discretion  or 
demand  of  the  buyer.  But  the  capitalist  dealer  withholds  his  goods 
from  the  market  until  such  time  as  he  can  command  his  price,  and 
the  shrewdest  producer  or  dealer,  the  man  who  in  the  long  run 
commands  the  best  service,  and  gains  the  largest  profits,  is  he 
who  can  anticipate  with  the  greatest  accuracy  the  demand  of  the 
market. 

--  I  refer  to  these  facts,  in  which  what  I  am  stating  will  not  be 
found  to  differ  materially  from  the  views  entertained  by  most 
economists,  because,  at  the  present  time,  the  crudest  ideas  are 
afloat  about  the  relations  of  labour  and  capital,  in  which  the 
functions  of  the  l^ter  are  vihfied,  and  a  violent  competition  is 
proposed  between  the  state  on  the  one  hand,  that  is,  all  who  have 
no  property,  aud  the  private  capitalist  on  the  other.  The  experi- 
ment of  the  state,  or  rather  the  taxpayer,  finding  competitive 
capital  has  been  tried.  It  was  the  theory  of  Elizabeth's  last 
poor  law,  and  it  failed  disastrously,  to  the  condign  misery  of  the 
worliman,  a  misery  prolonged  for  centuries,  as  I  hope  to  show. 
Nothing  is  gained  by  exaggerating  the  benefits  which  capital 
confers.  Nothing  will  be  gained  by  depreciating  its  real  services. 
It  has  been  shrewdly  observed  that  capital  and  labour  are  like  the 
two  blades  of  a  pair  of  scissors,  powerless  apart,  bat  apt  to  their 
function  when  properly  fitted. 

Now  all  economists  agree,  that  profits  in  the  general  sense  are  made 

'  up  of  three  elements,  interests  on  advances,  whether  made  from  his 

property  by  the  capitalist  agent,  or  supplemented  by  loans  from 


INCIDENTS  AND  LABOUR  AND  CAPITAL,  19 

those  who,  being  unable  to  employ  their  own  wealth,  are  willing  for 
a  consideration  to  lend  it  to  others.  The  rate  of  interest  is  high 
when  loan  capital  is  scarce,  low  when  loan  capital  is  abundant. 
But  it  is  always  a  measurable  quantity.  A  second  element  is  risk, 
a  quantity  which  cannot  be  measured,  for  if  it  were  measureable  it 
would  cease  to  be  risk,  but  must  be  estimated.  It  varies  exceed- 
ingly in  different  callings.  It  is  probably  greatest  in  the  case  of 
the  agriculturist,  particularly  if  his  principal  culture  is  exposed  to ; 
numerous  unforeseen  accidents.  I  mention  this  mainly  to  show  how  ! 
serious  an  element  risk  is,  in  the  tender  of  an  agricultural  rent.  In 
the  course  of  these  lectures  I  shall  be  able  to  give  numerous  illus- 
trations from  economical  history  of  the  disturbance  which  this 
contingency  has  caused.  The  third  is  the  labour  of  superintendence; 
the  time,  toil,  anxiety,  skill  which  the  capitalist  employer  must 
give  to  the  details  of  his  business.  To  these  one  may  add  a  fourth, 
which  is,  perhaps,  only  a  modification  of  the  second,  the  inevitable 
wear  of  implements,  and  the  rapidity  with  which  machinery  becomes 
obsolete  or  comparatively  inefficient.  Now  it  will  be  plain  that,  in 
the  language  of  logicians,  the  first  two  elements  of  profit  are  objec-\ 
tive,  i.e.,  they  are  external  to  the  agent,  and  determined  by  condi- 
tions which  the  agent  cannot  control.  The  third,  his  own  labour, 
is  subjective,  and  it  is  plain  that  on  this  his  real  profits  depend. 
Our  analysis,  therefore,  shows  that  the  capitalist  employer  is  a 
labourer,  and  that  his  remuneration  depends  entirely  on  the 
efficiency  of  his  labour.  Whether  or  no  he  gets  too  much  in  the 
distribution  of  the  gross  value  is  another  question,  but  the  more 
necessary  workmen  make  him,  by  being  as  much  as  possible  unlike 
him,  the  greater  will  be  his  share. 

Now  let  us  turn  to  the  recipient  of  wages,  the  labourer  or  work- 
man strictly  bo  called.  The  Greek  philosophers,  by  a  happy 
generalization,  called  him  efi^pvxov  opyavov,  a  living  machine,  and  the 
phrase  is  far  more  significant  to  us  than  it  was  to  them,  for  they 
degraded  labour  by  permitting  slavery.  The  labourer  in  our  days 
is  a  machine  which  has  been  constructed  at  no  little  cost;  but  far 
more  important  than  the  cost  is  the  aptitude,  whether  it  be  heredi- 
tary or  imitative,  with  which  the  civilized  man  grapples  with 
industrial  avocations.  You  have  all  of  you  seen  many  of  those 
wonders  of  mediaeval  art,  the  great  cathedrals  and  churches  of  this 


20  TEE  ECONOMIC  SIDE   OF  HISTORY. 

country,  indeed  of  Western  Europe.  In  most  cases,  the  architects 
of  these  marvellous  works  are  unknown,  for  the  very  sufficient 
reason  that  they  were  designed  by  workmen.  The  mason  or 
carpenter  who  can  draw  out  his  plot,  i.e.,  furnish  the  design  of  the 
structure  which  his  hands  set  up,  is  mentioned  over  and  over  again 
in  our  early  Statute  Book.  Familiar  as  I  am  with  agriculture,  I  am 
constantly  amazed  at  the  numerous  accomplishments  of  a  first-class 
farm-hand,  who  is  most  fit  by  the  multiplication  of  his  employ- 
ments, as  the  artizan  or  factory  hand  is  by  their  division.  He  will 
draw  a  furrow  across  a  hundred-acre  field  with  a  precision  of  an 
artist,  and  prove  the  correctness  of  his  eye,  by  the  completeness 
with  which  he  finishes  the  field.  To  make  a  serviceable  ditch -with 
its  proper  inclination  is  no  slight  feat.  To  build  and  thatch  a  rick 
squarely,  to  trim  a  hedge  neatly,  to  reap  and  mow  evenly  require 
much  practice  and  skill.  The  shears  which  the  shepherd  plies  are 
rude  instruments,  but  in  practised  hands  they  do  their  work  deftly. 
A  good  farm-hand  generally  knows  as  much  practical  husbandry  as 
his  employer,  and  is  as  skilful  in  the  treatment  of  cattle  as  a  farrier. 
On  such  training  as  this  interest  has  to  be  paid,  as  surely  as  on  the 
property  or  loans  of  the  employer.  The  form  it  takes  is  in  suflficient 
income  for  the  industrial  education  of  his  successors,  and  the 
fortunes  of  a  country  will  decline  if  the  successor  is  not  forthcom- 
ing, or  if  folly  drives  him  away  from  his  native  soil. 

The  element  of  risk,  the  inevitable  wear,  and  the  ultimate  extinc- 
tion, of  this  living  instrument  are  manifest  enough.  His  remunera- 
tion must  cover  this  contingent  charge,  or  it  must  be  covered  at  the 
expense  of  others.  The  machinery  of  the  English  poor  law  enables 
the  employer,  who  reaps  the  profit  of  the  workman's  labour,  to 
transfer  to  the  shoulders  of  all  occupiers  the  insurance  of  the 
labourers'  risk.  To  be  sure,  with  commendable  forethought,  the 
best  workmen,  either  through  benefit  societies  or  labour  partnerships, 
seek  to  effect  their  own  insurance.  In  the  Middle  Ages  they  did  it 
through  their  guilds,  purchasing  lands  and  houses  all  over  England 
for  charitable  service  to  their  own  order.  Unluckily  for  them,  as 
the  piety  of  the  age  considered  prayers  for  the  dead  to  be  a  charity, 
these  guild  lands  were  confiscated  on  the  plea  that  the  use  was 
superstitious,  and  people  wonder  that  workmen  became  improvident. 
The  London  guilds  made  ransom,  with  the  result  that  the  charitable 


LABOUR  WAGES  AND  CAPITAL  PB0FIT8  IDENTICAL.  21 

and  social  funds  which  were  given  hy  traders  and  artisans  have  been 
appropriated  by  those  who  are  in  no  other  sense  their  successors. 

The  costs  of  training  and  the  risks  of  the  calhng  are,  as  in  the 
case  of  the  employer,  objective  charges  ;  the  remuneration  for  work 
actually  done  is  subjective.  So  that  we  come  to  the  conclusion, 
that  the  wages  of  the  employer  and  of  the  workmen  are  generically 
identical  and  only  specifically  different.  The  question  between  the 
two  parties  engaged  in  the  joint  product  is,  what  is  the  share  which 
each  party  shall  receive,  the  cost  of  materials  being  deducted  in  the 
residual  distribution.  Here,  of  course,  the  problem  is  insoluble 
as  long  as  each  is  the  interpreter  of  his  own  value.  In  old  days  tbe 
distribution  was  determined  by  an  oppressive  authority,  the  resistance 
to  which  was  naturally  unreasoning  violence.  Gradually  both 
parties  began  to  see  that  the  question  was  arguable,  and  they  fre- 
quently had  recourse  to  arbitration.  We  are  beginning  to  hope 
that  masters'  unions  and  labour  partnerships  will  ere  long  settle 
their  differences  by  some  self-acting  machinery. 

Now  I  have  referred  to  these  elementary  economical  principles, 
not  only  because  a  right  conception  of  them  is  essential  towards 
the  interpretation  of  all  economical  problems,  but  because,  in  these 
lectures  on  the  economical  interpretation  of  English  history,  I  shall 
have  frequent  occasion  to  show  how  the  industrial  partnership  and 
the  subsequent  distribution  of  the  product  have  been  warped  from 
their  natural  bias  by  legislative  violence. 

Five  or  six  centuries  ago,  the  industry  of  EngHsh  life  was  very 
simple.  Three-fourths  of  the  people  were  husbandmen,  cultivating 
their  small  farms.  There  was  always,  it  seems,  a  certain  number  of 
agricultural  labourers,  who  sought  work  in  the  villages.  It  is  clear 
that  during  the  harvest  all  but  the  very  few  men  of  leisure  were 
engaged  in  field  labour,  for  the  rule  against  strangers  was  relaxed 
in  the  case  of  the  harvest  man.  Employers  purchased  materials, 
iron,  steel,  lead,  hme,  stone,  timber,  which  the  craftsmen  worked 
up,  as  they  do  in  Hindostan  now.  When  it  was  possible,  piece-  ■ 
work  was  tbe  rule.  It  is  highly  probable,  nay,  almost  certain,  that 
even  the  artisans  were  during  parts  of  the  year  husbandmen.  I  have 
seen  frequent  evidence  of  the  fact. 

Suddenly  a  great  plague,  the  like  of  which  was  not  recorded, 
attacked  Europe  almost  simultaneously.    Like  most  plagues,  it  was 


22  THE  ECONOMIC  SIDE   OF  EISTOMY. 

much  more  deadly  at  first  than  it  was  subsequently,  though  it  he!3 
its  own  in  England  for  more  than  three  centuries.  It  probably 
killed  a  third  of  the  population.  The  wages  of  labour  were  instantly 
doubled,  and  the  ruin  of  the  great  proprietors  seemed  imminent.  The 
profits  of  capitalist  agriculture  sank  from  20  per  cent,  to  near  zero. 
Now,  the  great  proprietor  saw  no  harm  in  a  high  price  for  what  he 
had  to  sell,  but  deemed  that  a  high  price  in  what  he  had  to  buy  was 
a  grievous  wrong.  So  he  made  use  of  the  constitution — that  is,  of 
the  Administration  and  Parliament — in  order  to  secure  or  recover 
bis  fortunes.  It  is  true  that  the  means  by  which  unfair  or  impossible 
contracts  were  enforced  was  not  brought  to  the  perfection  which  we 
witness  in  modern  times,  and  for  a  long  time  the  employers  of 
labour  were  baffled. 

The  fact  is,  a  new  criticism  of  existing  institutions  had  been 
encouraged.  The  riches  and  the  immunities  of  the  monastic 
orders  caused  much  dissatisfaction.  Why  should  not  the  opulent 
monks  be  made  to  pay  a  large  share  of  taxation  ?  Why  should  the 
Pope  be  allowed  to  levy  toll  and  tribute  in  England  ?  These  dis- 
contents found  frequent  expression,  and  the  radical  reformer  and 
his  emissaries  were  welcomed  and  caressed  in  high  places.  But  in 
course  of  time,  the  same  bold  theorists  began  to  examine  into  the 
moral  title  of  all  property,  to  declare  that  lordship  was  founded  in 
grace,  that  is,  on  deserts,  and  to  dispute  all  other  claims  to  ownership. 
They  even  declared  that  useful  labour  was  more  valuable  than 
birth,  and  rhymed  on  the  relative  antiquity  of  honest  work  and 
gentle  blood.  They  became  the  mouthpiece,  the  agents,  the 
organizers  of  the  peasantry,  and  they  managed  their  function  with 
secrecy  and  efficiency.  At  last,  out  of  a  clear  sky,  in  June,  1381, 
the  storm  burst,  and  England  was  in  insurrection  simultaneously 
from  Southampton  to  Scarborough.  The  insurrection  was  quelled, 
the  leaders  were  executed,  the  teaching  which  was  once  so  popular 
was  branded  as  heresy,  and  the  secular  arm  was  constrained  to 
support  the  clergy,  but  lately  so  unpopular,  with  fire  and  faggot. 
But  the  solid  victory  remained  for  nearly  three  centuries  with  the 
peasants,  till  at  last  a  combination  of  circumstances  reversed  the 
situation,  and  the  employers  became  the  masters  of  the  field.  It  is 
to  the  history  of  this  long  battle  that  I  intend  on  the  next  occasion 
^  invite  your  attention. 


n 

LEGISLATION  ON  LABOUE  AND  ITS  EFFECTS. 

The  effects  of  the  Great  Plague — Regulation  of  prices  hy  authority 
customary  when  there  were  labour  prices — The  first  Statute  of 
Labourers — Successive  Statutes  of  Labourers — The  appeal  of  the 
workmen  to  Domesday — The  events  of  1381 — Legislation  of  Henry 
IV.,  v.,  VI. — Guilds  of  artificers — Henry  VII.  and  Henry  VIII. — 
Habits  of  the  latter — His  issue  of  base  money — The  position  of 
Elizabeth — The  Elizabethan  Statute  of  Labourers — The  objects 
of  the  statute — Indirect  resources  of  labourers — Wages  actually 
paid — Assessments  more  gen&rous  under  the  Commonwealth. 

It  is  inevitable,  in  a  series  of  lectures  like  the  present,  wliere  far- 
reaching  and  present  effects  are  traced  to  distant  causes,  that  one 
should  seem  discursive  when  one  strives  to  be  connected.  The  war- 
fare of  capital  and  labour  in  England  has  been  more  prolonged  than 
any  other  historical  struggle.  Dynastic  wars,  wars  of  religion,  wars 
on  behalf  of  the  balance  of  power,  wars  for  supremacy  in  commerce 
have  been,  as  you  well  know,  waged  in  Europe  for  lengthened 
periods.  But  none  has  been  so  lasting  as  that  between  employer 
and  labourer.  None  has  hitherto  been  so  obscure.  The  history  of 
the  contest  is  to  be  extracted  from  the  Statute  Book,  in  laws  long 
since  repealed  or  modified,  or  become  obsolete,  in  laws  which  no 
modern  edition  of  the  statutes  at  large  reprints.  I  doubt 
whether  they  exist  in  any  other  printed  form  than  in  the  numerous 
folio  volumes  in  which  all,  or  nearly  all,  the  English  laws  ever 
enacted  were  published,  by  authority  of  Parliament,  in  extensor  but 
are  found,  I  believe,  only  in  the  greatest  of  our  public  Hbraries. 


24        LEGISLATION  ON  LABOUB  AND  ITS  EFFECTS. 

These  laws,  however,  would  be  only  indefinite,  incoherent,  and 
more  or  less  effiectual  explosions  of  wrath  and  discontent,  were  it 
not  for  the  contemporaneous  evidence  of  wages  actually  paid,  evi- 
dence which  I  have  been  able  to  supply,  having  long  been  an 
assiduous  and  solitary  worker  in  this  field  of  research.  The  law 
and  the  facts  illustrate  each  other.  But  I  must  say,  with  some 
regret,  that  the  inferences    which    I    am   constrained  to  draw, 

^  inferences  which  are  genuine  and  irrefutable  history,  have  not 
increased  my  reverence  for  the  machinery  by  which  the  social  state 
of  England  has  been  developed.  There  is,  I  must  confess,  a  sordid 
side  to  the  most  energetic  efforts  of  collective,  I  do  not  say 
individual,  patriotism,  and  the  student  of  the  economical  history  of 

/^England  has  to  prepare  himself  for  painful  experiences,  even  during 
the  most  heroic  ages  of  our  political  history.  At  the  same  time, 
men  are  not  to  be  blamed  for  taking  advantage  of  what  law  accords 
them.  It  is  to  their  credit  that,  in  course  of  time,  they  became 
more  merciful  than  the  law,  as  I  have  found  that  they  constantly 
were.  They  never,  to  be  sure,  when  they  made  the  machinery  of 
their  discipline,  and  what  they  called  law  and  order,  more  searching 
and  more  severe,  declared  that  they  had  created  no  new  crime,  when 
their  principal  and  successful  effort  was  to  render  it  impossible,  by 
studiously  demoralizing  the  agents  of  law,  to  distinguish  between 
innocence  and  guilt. 

I  have  referred,  in  the  last  lecture,  to  the  magnitude  of  the 
calamity  known  as  the  Plague,  and  more  recently,  it  seems,  as  the 
Black  Death.  Before  this  event,  and  the  consequences  which 
ensued  from  it,  these  consequences  having  been  almost  immediate, 
every  one,  from  the  king  to  the  serf,  cultivated  land  for  his  own 
profit.  It  is  impossible  to  conceive  any  social  condition  which 
would  be  so  certain  to  breed  a  reverence  for  law  and  property  as  one 
in  which  every  person  was  possessed  of  property,  which,  unless  pro- 
perty were  respected,  was  so  open  to  marauders  as  agricultural  pro- 
duce was.  I  have  no  doubt  that  the  singular  respect  for  property 
in  agricultural  produce  which  so  distinguished  Englishmen  in  the 
fourteenth  century,  and,  for  the  matter  of  that,  onwards,  and  the 
honour  in  which  husbandry  was  held,  had  a  good  deal  to  do  with 
the  formation  of  the  early  English  character  among  all  classes. 
Even  in  the  severest  time — I  can  give  the  negative  testimony  of  my 


TBE  EFFECTS  OF  THE  GREAT  PLAQUE.  25 

own  iDquiries — it  was  rare  indeed  that  farm  produce  was  stolen.  I 
do  not  mean  to  say  that,  outside  the  jurisdiction  of  the  local  courts,  j 
the  foreign  trader,  the  Lowland  exchanger,  or  even  the  Pope's  iff}/L<A/ifi^i 
emissary,  could  traverse  the  king's  highway  in  complete  safety.  I 
will  not  even  assert  that  abbots  and  priors  were  always  able  to  con- 
vey their  cash  and  valuables  without  risk  of  Robin  Hoods.  But 
the  insurance  on  the  conveyance  of  money  is  very  low  when  it  is 
put  into  the  hands,  as  it  often  is,  of  the  common  carrier,  and  I 
have  never  found  the  record  of  a  loss  from  robbers  in  the  many 
thousand  collegiate  and  monastic  accounts  which  I  have  read. 
Englishmen  were  very  prone  to  defend  their  rights,  real  or  supposed, 
by  insurrection,  and  even  to  depose  bad  or  weak  kings,  and  change 
the  succession,  but  they  rarely  broke  the  king's  peace.  Even  during 
the  civil  wars  of  the  fifteenth  and  seventeenth  centuries  there  was 
little  marauding.  In  1461,  the  Northern  army  of  Margaret  took  to 
pillaging,  and  Edward  was  instantly  called  to  the  throne.  In  the 
Parliamentary  war,  1642-5,  the  Royalists  of  the  west  showed  an 
imperfect  appreciation  of  the  rights  of  property,  and  they  had  to 
meet  the  resistance  of  the  clubmen. 

On  the  other  hand,  it  was  the  custom  of  the  age  to  regulate  i^.-^ 
prices  by  authority.  The  assize  of  bread  and  beer  is  so  old  that  it  is 
undated.  For  centuries  afterwards  local  authorities  were  empowered 
to  fix  prices.  The  Vice-Chancellor  of  Oxford,  in  the  seventeenth  V 
century,  put  out  his  list  of  maximum  prices  for  meat,  poultry,  and 
wine,  and  even  of  the  fares  on  the  new  stage  coaches.  The  law 
did  not  afi^ect  to  regulate  the  prices  of  wheat  and  malt.  Such  a 
function  was  beyond  the  power  of  the  legislator,  and,  it  must  be 
added,  against  his  interests.  But  the  law  regulated  the  price  at 
which  wheat  could  be  turned  into  bread  and  malt  into  beer.  The 
Statute  Book  is  full  of  regulations  as  to  the  price  of  meat  and  cloth-  «^ 
ing.  Nor  does  it  seem  that  these  regulations  caused  discontent. 
It  was  probably  considered  an  advantage  that  certain  services 
regularly  needed  should  be  put  under  a  local  police,  which  should 
see  that  statutable  prices  were  not  exceeded.  Not  a  little  of  the 
criminal  business  transacted  at  the  manor  court  is  that  of  present- 
ments and  fines  in  the  case  of  the  baker  and  brewer  and  the 
fraudulent  miller,  who  have  broken  the  assize  or  cheated  the 
tenants.     The  landowners,  then,  were  not  attempting  to  enforce 


26        LEGISLATION  ON  LABOVB  AND  ITS  EFFECTS, 

^  an  absolute  novelty  when  they  demanded  and  obtained  the  Statute 
of  Labourers. 

In  the  first  instance  the  king  addressed  a  proclamation  to  "William 
the  Primate,  as  the  urgency  was  great,  ordering  that  workmen 
should  labour  at  the  old  wages.  This  act  of  the  king's  is  a  curious 
illustration  of  the  situation.  Death,  the  new  death,  or  as  the 
Scotch  called  it,  though  only  for  a  time,  the  foul  death  of  the 
English,  had  been  busy  with  the  Church,  and  Edward  had  offered 
the  see  of  Canterbury  to  William  Edyndon,  the  predecessor  of 
William  of  Wykeham  in  the  see  of  Winchester,  and  Edyndon  had 
declined  it.  The  ultimate  occupant  was  Simon  Islip.  Parliament 
was  at  once  summoned,  and  the  first  Statute  of  Labourers,  23  Ed. 
III.,  was  enacted. 

The  preamble  of  the  Act  recites  the  fact  and  the  effects  of  the 
Pestilence,  the  straits  to  which  masters  were  put  by  tbe  consequent 
scarcity  of  servants,  who  will  not  work  except  at  excessive  wages. 
It  then  provides  that  every  person  under  sixty  years  of  age  who 
does  not  live  by  merchandise,  exercises  no  craft,  who  has  no  means 
of  his  own,  or  proper  land  for  his  occupation  in  tillage,  and  who  is 
not  serving  any  particular  master,  shall  be  bound  to  serve  in  hus- 
bandry, whoever  may  require  him,  at  the  wages  customary  in  the 
twentieth  year  of  the  king's  reign.  Lords  who  have  bond-men  and 
bond-tenants  have  a  prior  claim  to  tbeir  services — a  proof  that  when 
the  dues  were  paid  which  were  annexed  to  such  persons'  holding, 
they  were  free  to  work  for  whom  they  pleased.  Any  two  men  could 
denounce  the  person  who  refused  to  work  to  the  sheriff,  wlio  could 
imprison  him.  To  use  a  modern  phrase,  "if  a  servant  in  hus- 
bandry struck  work,"  he  should  be  imprisoned,  and  the  employment 
of  such  a  person  after  his  liberation  should  involve  tlie  same  penalty 
on  the  employer.     If  higher  than  customary  wages  were  taken,  a 

>/  penalty  of  double  the  amount  given  and  received  should  be  in- 
flicted, the  process  being  taken  in  the  Lord's  court.  But  if  the  lord 
himself  gives  more  than  the  law  allows,  he  is  to  be  prosecuted  in 
the  county  wapentake,  tithing,  or  other  court,  and  treble  penalties 
are  to  be  inflicted  on  him.  Artificers,  many  kinds  being  named,  and 
a  general  clause  including  all  others  being  added,  are  also  to  expect 
the  wages  of  1346.  Then  comes  a  clause  declaring  tbat  provisions 
shall  be  sold  at  reasonable  rates,  under  penalties,  the  administration 


THE  FIB8T  STATUTE  OF  LABOUBEBS.  27 

of  this  part  of  the  law  being  put  into  the  hands  of  mayors  and 
bailiffs  in  the  several  cities  and  towns,  and  no  gift  is  to  be  made  to 
beggars  who  can  work,  under  pain  of  imprisonment.  The  Act  is  to 
be  published  by  archbishops  and  bishops  in  all  churches  of  their 
several  dioceses,  and  the  parochial  clergy  are  bidden  to  see  that  the 
law  is  enforced. 

The  legislation  of  1 349  was  a  total  failure.  It  is  probably  the  t^ 
case  that  the  reference  to  the  Lord's  court,  in  which  a  formal  pre- 
sentment of  offenders  had  to  be  made  first,  and  the  cases  to  be  tried 
by  a  jury  next,  was  the  cause  of  the  ill-success  of  the  legislation. 
There  arose  a  custom  of  entering  the  amount  of  the  labourer's 
demand  in  the  account,  then  running  it  through  with  a  pen  and 
substituting  the  statutory  amount.  The  bailiffs  kept  the  letter  of  ^ 
the  statute,  but  paid  the  higher  wages. 

In  1350-1,  25  Ed.  III.,  Parliament,  with  the  assent  of  prelates, 
earls,  barons,  and  other  great  men,  descants  on  the  malice  of  ser- 
vants, asserts  that  they  pay  no  respect  to  the  older  statute,  and 
refuse  to  work  except  at  double  or  treble  wages.  New  provisions  ^^ 
are  therefore  enacted.  The  money  wages  of  all  kinds  of  workmen, 
servants  in  husbandry,  and  artisans,  are  fixed  at  certain  rates,  as 
long  as  wheat  is  under  6s.  8d.  a  quarter.  The  jurisdiction  of  offences 
is  transferred  from  the  Lord's  court  to  the  justices,  who  are  to  meet 
for  the  purpose  of  hearing  and  adjudicating  on  offences  at  least  four 
times  a  year,  and  are  empowered  to  inflict  forty  days'  imprisonment 
for  the  first  offence,  three  months  for  the  second,  six  for  the  third, 
as  well  as  levying  the  fines  of  the  first  statute,  the  penalties  to  go 
to  the  exchequer.  Servants  flying  from  county  to  county  were  to 
be  arrested.  Contemporary  writers  assure  us  that  this  became  a 
common  practice,  workmen  no  doubt  seeking  those  locaUties  in 
which  labour  was  most  required,  and  developing  an  organization  for 
information  and  action.  In  fact,  we  are  told  that  associations 
exactly  like  those  of  modem  trade  unions  were  entered  into,  the 
members  subscribing  for  purposes  of  defence  and  for  paying  such 
fines  as  might  be  imposed.  In  a  subsequent  statute,  25  Ed.  III. 
cap.  7,  provision  was  made  for  paying  the  fines  and  estreats  into 
the  exchequer. 

The  Act  was  again  a  failure.    If  we  can  infer  from  the  next  legis- 
lation, the  ill-success  of  the  measure  was  due  to  the  fines  being 


28        LEGISLATION  ON  LABOUB  AND  ITS  EFFECTS. 

payable  to  the  Crown.  There  was  and  there  remained  a  scarcity  of 
workmen.  The  void  was  not  satisfactorily  filled  by  imprisoning 
the  obstinate,  and  the  aggrieved  person,  the  employer,  was  not 
particularly  active  in  levying  fines  which  should  go  to  the  king. 
Besides,  the  landowners  soon  despaired  of  carrying  on  the  old 
sybuem  of  cultivation  with  their  own  stock,  under  bailiffs,  and 
rapidly  devised  a  new  relation  between  themselves  and  thoir 
lords,  the  stock  and  land  lease,  under  which  the  landowner  let  his 
stock  with  the  land  for  a  time  to  a  tenant  farmer.  Under  31  Ed. 
III.  statute  1,  caps.  2  and  7,  the  fines  enacted  for  breaches  of  the 
statute  were  to  go  to  the  lords,  and  London,  the  Cinque  Ports,  and 
all  other  franchises  were  brought  under  the  general  law. 

The  office  of  justice  of  the  peace  was  remodelled  by  an  Act  of  84 
Ed.  III.  The  fine  on  the  recalcitrant  labourer  was  abolished,  for 
the  action  of  the  lord  was  now  superseded.  But  imprisonment  was 
to  remain,  and  the  ofience  was  to  be  no  longer  bailable.  Artisans 
are  to  be  included  in  the  new  legislation.  Wages  are  to  be  by  the 
day,  not  the  week,  but  persons  may  contract  in  gross  for  work  to  be 
done.  Then  the  statute  throws  a  curious  light  on  the  organizations 
which  artisans  had  entered  into,  when  it  declares  that  the  "  alliances, 
covines,  congregations,  chapters,  ordinances,  and  oaths  made  or  to 
be  made  by  masons  and  carpenters  shall  be  void  and  annulled." 
The  fi'eemason  of  our  day  may  detect  in  these  associations  the 
germ  of  his  lodge,  the  economist  may  allow  this  view,  but  sees  in 
them  the  trades  union  of  the  fourteenth  century.  The  policy  of  the 
labourers  is  further  illustrated  by  a  clause  in  the  Act,  under  which 
fugitive  labourers,  by  whom  must  be  meant  other  than  serfs,  since 
these  could  always  be  reclaimed,  were  to  be  outlawed,  and  branded 
with  the  letter  F.  Furthermore,  mayors  and  bailiffs  are  constrained 
to  deliver  up  all  fugitive  labourers,  under  a  penalty  of  £10  to  the 
king  and  a  hundred  shillings  to  the  aggrieved  party.  By  the  36  Ed. 
III.  cap.  8,  domestic  chaplains  are  brought  under  the  Statute  of 
Labourers,  and  their  wages  are  fixed.  Five  marks,  £3  6s.  8d.,  were 
declared  to  be  a  sufficient  stipend  for  such  persons.  By  42  Ed.  III. 
it  is  ordered  that  the  Statute  of  Labourers  should  be  enforced  by  the 
justices. 

The  reign  of  Kicaard  II.  gives  us  fresh  information  as  to  the 
course  of  the  struggle.     **  Villams,"  the  preamble  says,  "  withdraw 


SUCCESSIVE  STATUTES  OF  LABOUBEBS.  29 

their  services  and  customs  from  their  lords,  by  the  comfort  and 
procurement  of  others,  their  counsellors,  maintainors,  and  abettors, 
which  have  taken  hire  and  profit  of  the  said  villains  and  land- 
tenants,  by  colour  of  certain  exempHfications  made  out  of  Domes- 
day, and  affirm  that  they  are  discharged,  and  will  suffer  no  distress. 
Hereupon  they  gather  themselves  in  great  routs,  and  argue  by  such  \ 
a  confederacy  that  every  one  shall  resist  their  lords  by  force."  The  j  *,  \ 
justices  are  to  take  cognizance  of  such  practices,  imprison  the 
offenders,  and  inflict  fines  to  king  and  lord  on  the  counsellors  of 
such  persons.  This  is  an  Act  of  the  1  Eic. ;  in  the  next  year  the 
Statute  of  Labourers  is  confirmed. 

This  remarkable  preamble  refers  no  doubt  to  the  company  of  poor 
priests,  whom  WikHf  had  appointed,  and  who  were  the  channel  by 
which  communications  were  kept  up  among  the  disaffected  serfs.  It 
is  clear,  too,  that  they  had  taken  and  paid  for  legal  advice,  and  that 
the  purport  of  this  advice  was,  that  according  to  the  most  ancient 
and  venerable  authority,  Domesday,  the  satisfaction  of  the  legal 
obHgations  of  the  tenant  in  villenage  was  a  bar  to  the  claim  of  any 
further  service  on  the  part  of  the  lord,  and  especially  to  that  part 
of  the  Statute  of  Labourers  which  gave  a  prior  claim,  at  the  old 
rates,  of  the  serfs  extra  services,  to  the  lord  on  whom  he  depended. 

It  is  not  a  Httle  singular  that  the  administration  and  Parliament 
were  entirely  in  the  dark  about  the  danger  which  was  menacing 
them.  The  preamble  of  this  statute  supplied  me,  more  than  twenty 
years  ago,  with  the  key  to  Tyler's  and  Littlestreet's  insurrection  in  £. -^ 
1381.  The  lords  had  attempted  to  make  claims  on  the  serfs,  and 
were  indeed  backed  by  Parliament,  which  would  have  practically 
enlarged  the  hability  of  their  tenures.  They  had  claimed  the  old 
labour  rents,  which  had  long  been  commuted  for  money  payments, 
so  long  that  no  memory  went  back  to  the  more  ancient  custom,  and 
had  demanded  further  sacrifices  from  them.  There  was  no  villenage 
in  Kent,  but  Tyler,  of  Dartford,  had  made  common  cause  with  the 
workmen,  and  probably  had  far  more  ambitious  ends  than  the 
removal  of  social  grievances.  It  appears,  too,  that  some  of  the 
nobles,  notably  Montacute,  Earl  of  Salisbury,  were  in  sympathy 
with  the  insurgents,  and  we  know  that  some  of  the  city  aldermen 
favoured  them.  The  ostensible  object  of  the  insurrection  was  the 
total  abolition  of  all  the  incidents  of  villenage. 


30       LEGISLATION  ON  LABOUB  AND  ITS  EFFECTS. 

The  story  of  Tyler's  insurrection  is  told  with  sufficient  details  in 
all  the  ordinary  history  books,  and  those  of  modem  date  have 
accepted  in  silence  the  proof  that  I  published  more  than  twenty 
years  ago  as  to  the  causes  and  consequences  of  the  insurrection.  The 
late  Mr.  Tom  Taylor  told  me  that  when  he  discovered  the  real  facts 
of  the  case,  as  I  had  narrated  them,  he  was  exceedingly  struck  with 
the  situation,  and  that  he  meditated  writing  an  historical  drama  on 
the  subject.  In  point  of  fact,  the  whole  political  and  social  consti- 
tution of  England  was  imperilled,  and  there  was  great  reason  in 
what  the  young  king  told  his  mother,  after  the  events  of  Smithfield, 
that  he  had  lost  and  recovered  his  crown  on  that  day. 

Notwithstanding  the  harsh  language  to  the  discomfited  rebels, 
which  the  chroniclers  put  into  the  young  king's  mouth,  it  is  clear 
that  he  wished  to  concede  to  the  demands  of  the  serfs.  He  con- 
sulted Parliament  as  to  whether  he  should  give  effect  to  the  charters 
of  manumission  which  he  had  granted,  and  when  Parliament  indig- 
nantly refused,  as  it  often  does  to  this  day  refuse  to  hsten  to  wise 
counsel,  the  judges,  I  am  persuaded  at  the  king's  instance,  gave  the 
most  favourable  constructions  possible  on  these  servile  tenures,  and 
protected  the  serf  from  arbitrary  action.  Eichard  himself,  too, 
refused  to  bind  the  yoke  more  strictly,  and  when  Parliament  peti- 
tioned that  the  sons  of  serfs  should  be  declared  incompetent  of  holy 
orders,  he  flatly  and  peremptorily  rejected  their  petition.  He  had 
no  mind  to  provoke  the  risks  of  another  Mile-end  or  Smithfield. 
Henceforth  the  characteristics  of  tenure  in  villenage  and  serfdom 
became  slighter  and  more  indistinct,  though  faint  traces  of  personal 
disability  can  be  detected  as  late  as  the  sixteenth  century.  Tenure 
by  villenage  is  rapidly  called  tenure  by  copy,  and  any  discredit 
attaching  to  the  tenant  of  bare  lands  is  speedily  lost  in  the  land- 
hunger  of  the  fifteenth  century,  when  copyholds  were  pm'chased  by 
nobles  and  knights. 

General  pardons  were  speedily  issued,  at  first  to  those  who  had 
been  guilty  of  illegahties  in  suppressing  the  insurrection ;  next  to 
the  insurgents  themselves,  though  a  long  list  of  exceptions  is  pub- 
lished, the  majority  being  Londoners.  In  one  case  the  insurgents 
of  Edmundsbury  were  pardoned,  but  were  constrained  to  plead 
their  pardon  and  give  security  to  the  Abbot  of  Bury.  You  will  find 
the  narrative  of  the  serfs'  acts  and  claims  in  Walsingham,  and  the 


THE  EVENTS  OF  1381.  81 

expedients  which  the  reluctant  abbot  adopted  in  order  to  elude  the 
insurgents.  There  is  however  an  Act  of  this  reign,  9  Ric.  II.  cap.  2, 
under  which  provision  is  made,  that  if  villains  and  niefs  (female 
serfs)  bring  fictitious  suits  against  their  lord,  he  is  not  to  be  fore- 
barred  by  answering  at  law.  By  the  ancient  custom,  if  a  lord 
pleaded  against  a  serf  of  his  own  in  a  court  of  law,  he  admitted  by 
implication  the  serfs  manumission,  and  was  held  to  have  enfran- 
chised him. 

I  have  given  this  slight  sketch  of  the  events  of  1881,  because  the 
gradual  emancipation  of  the  serfs,  dating  unquestionably  and  pro- 
ceeding progressively  from  the  great  Insurrection,  must  have  had 
its  effect  in  strengthening  the  hands  of  all  labourers  in  resistance  to  ' 
these  interested  statutes.  The  free  labourers  had  made  common 
cause  with  their  meaner  fellow-countrymen,  and  were  now  rein- 
forced by  those  whom  they  had  helped  to  emancipate.  Fortunately 
for  human  progress,  there  are,  and  we  trust  there  always  will  be, 
many,  who  being  in  no  appreciable  peril  themselves  at  the  hands  of 
those  who  wield  power  selfishly  or  claim  rights  injuriously,  by  the 
aid  of  their  dependents  and  their  sycophants,  undertake  the  cause 
of  the  oppressed,  and  gain  victories  in  which  they  win  no  spoil. 
Beyond  doubt,  even  in  that  day,  there  were  many  men  who,  having 
freedom  and  rights  themselves,  thought  it  their  duty  to  aid  those 
whose  freedom  was  imperilled  and  whose  rights  were  assailed. 

It  was  not  to  be  imagined,  because  king  and  ParKament  relaxed 
the  feudal  lord's  grasp  on  the  serf,  that  they  were  likely  to  yield 
without  further  efforts  to  the  claims  of  the  labourer.  The  statute 
12  Ric.  II.  cap.  4,  while  it  re-enacts  the  original  Act  ol  Edward, 
introduces  some  new  provisions  into  the  law.  Alleging  that  *'  ser- 
vants and  labourers  will  not,  nor  ior  a  long  time  would  serve 
without  outrageous  and  excessive  hire,"  it  proceeds  to  fix  the  wages 
of  those  servants  in  husbandry  who  were  lodged  and  boarded  by 
their  employers.  But  it  also  introduces  a  passport  system.  It 
enacts  that  servants  going  from  one  employment  to  another  hiring 
shall  carry  letters  testimonial  from  their  late  employer,  puts  the 
obligation  to  carry  passports  on  pilgrims  and  beggars,  punishes 
those  who  are  without  such  letters  of  credit  with  the  stocks,  and 
those  who  forge  them  with  imprisonment,  at  the  discretion  of  the 
justices.     It  also  provides  that  such  persons  as  have  been  engaged 


82        LEGISLATION  ON  LABOUR  AND  ITS  EFFECTS. 

in  husbandry  up  to  twelve  years  of  age  shall  be  incapable  of  being 
apprenticed  to  trades  or  handicrafts,  and  declaTes  their  indentures 
void.  It  compels  artisans  to  labour  in  the  fields  at  harvest  time, 
and  puts  increasing  fines  on  those  who  give  or  receive  more  than 
the  legal  rates. 

The  4  Hen.  lY.  cap.  14  prescribes  that  labourers  should  be  hired 
by  the  day  and  not  by  the  week,  that  they  should  not  be  paid  for 
holidays,  nor  for  the  eves  of  feasts,  and  that  they  who  quit  work  at 
noon  should  be  paid  for  only  half  a  day.  The  Act  puts  a  penalty  of 
20s.  on  the  labourer  who  takes  more  than  the  statutory  payment. 
It  is  remarkable  that  in  1408  Henry  pays  four  carpenters  at  Windsor 
sixpence  a  day  for  365  days  in  the  year.  But  the  statute,  as  I  have 
proved  conclusively,  was  kept  by  neither  king  nor  subject. 

Under  7  Hen.  IV.  cap.  17,  re-enacting  the  Statute  of  Labourers, 
Henry  gave  an  answer  to  a  petition  presented  by  Parliament,  to  the 
effect  that  no  person  should  be  allowed  to  bind  his  or  her  son 
apprentice,  unless  he  had  40s.  a  year  in  land  or  rent,  an  income 
from  land,  which  up  to  recent  times  would  have  represented  at 
least  £80  a  year.  The  draftsman  of  the  petition,  after  stating  that 
there  was  great  scarcity  of  labour  owing  to  the  practice  of  appren- 
ticeship, enacts  that  the  limit  should  be  20s.  a  year,  and  puts  a 
penalty  of  100s.  on  any  person  who  takes  such  an  apprentice,  any 
person  being  permitted  to  inform  against  offenders.  But  the  Act 
allows  parents  to  put  their  sons  or  daughters  to  school  at  their 
discretion. 

By  2  Hen.  V.  cap.  4  the  Statute  of  Labourers  is  again  confirmed, 
and  order  is  taken  that  it  should  be  exemplified  and  sent  to  the 
sheriffs  for  pubHcation  in  the  county  court.  A  new  clause  is  added 
under  which  workmen  and  employers  may  be  examined  on  oath,  as 
to  wages  given  or  received,  and  a  further  power  is  given  to  the 
justices  of  issuing  writs  for  the  reclamation  of  fugitive  labourers. 
By  a  further  Act  of  the  same  reign  (4  Hen.  V.)  the  penalties  for  re- 
ceiving excessive  wages  are  hereafter  to  be  levied  from  the  receivers 
only. 

Legislation  on  the  wages  of  labour  is  abundant  and  inoperative 
during  the  next  reign,  the  long  minority  of  Henry  VI.  In  the 
second  year,  the  Statute  of  Labourers  is  re-enacted,  and  a  new  clause 
added,  one  which  was  hereafter  to  bear  such  evil  fruit,  that  the 


LEGISLATION  OF  THE  HENEIE8.  88 

justices  in  quarter  sessions  should  be  empowered  to  regulate  the 
rate  of  wages.  But  the  Act  was  temporary.  In  the  next  year, 
8  Hen.  VI.  cap.  1,  the  confederacies  and  yearly  congregations  of 
masons  in  general  chapters  and  assemblies  are  forbidden,  and  the 
punishment  of  fine  and  ransom  and  imprisonment  denounced  against 
offenders. 

By  6  Hen.  VI.  cap.  8  the  labour  statutes  of  Eichard  are  re- 
enacted,  and  the  clause  permitting  the  justices  of  peace  to  fix  the 
rate  of  wages  re-enacted  and  enlarged.  The  justices  in  every  county 
and  the  mayor  in  every  city  and  town  are  to  make  proclamation 
every  Easter  and  Michaelmas  fixing  how  much  each  workman  or 
artificer  is  to  have,  with  or  without  food,  and  these  proclamations 
are  to  have  the  force  of  statutes.  But  the  statute  is  again  temporary. 
It  is  re-enacted  by  8  Hen.  VI.,  and  is  to  endure  **  till  the  king  hath 
otherwise  declared  his  will  in  Parliament."  By  11  Hen.  VI.  the 
Statute  of  Apprenticeship  is  again  enacted,  but  London  is  exempted 
from  the  20s.  a  year  clause,  by  which  "  the  Londoners  are  grievously 
vexed  and  infuriated." 

By  15  Hen.  VI.  cap.  6  the  guilds  of  artificers  and  other  labourers 
are  attacked.  It  is  stated  that  "  guilds  interpret  their  own  charters 
for  their  own  profit,  and  to  the  damage  of  others."  The  new  law 
enacts  that  hereafter  all  letters  patent  and  charters  of  guilds  shall  be 
registered  before  the  justices  of  the  peace  in  counties  and  the  chief 
governors  of  towns.  A  penalty  of  £10  is  to  be  inflicted  on  every 
ordinance  which  is  not  in  accordance  with  the  charters.  You  will 
notice  that  county  or  village  guilds  must  have  been  numerous,  or 
they  would  not  have  been  made  the  subject  of  legislation  and  in- 
spection. By  18  Hen.  VI.  cap.  11  the  qualification  of  the  justice 
is  raised  to  £20  a  year  in  land. 

By  the  28  Hen.  VI.  cap.  12,  the  law  provides  that  a  servant 
shall  give  notice  to  his  employer  that  he  intends  to  leave  his  service, 
**  so  as  to  let  him  provide  a  new  one."  The  Act  also  gives  a  schedule 
of  wages,  in  which  the  rates  now  become  customary  are  all  but 
acknowledged.  It  also  declares  that  hirings  in  husbandry  shall  be 
for  a  year  certain.  There  is  no  legislation  on  the  subject  of  labour 
during  the  reigns  of  Edward  IV.  and  Eichard  III.  The  labourers 
had  won  the  day.  In  Henry  VII.'s  reign  the  rule  about  the  quali- 
fication of  apprenticeship  is  rescinded  in  the  case  of  Norwich  by 

4 


84       LEGISLATION  ON  LABOUR  AND  ITS  EFFECTS. 

11  Hen.  VII.  cap.  11 ;  and  by  cap.  22  of  the  same  year,  a  schedule 
of  wages  is  given,  which,  considering  the  cheapness  of  the  time,  is 
exceedingly  Uberal.  At  no  time  in  English  history  have  the  earn- 
ings of  labourers,  interpreted  by  their  purchasing  power,  been  so 
considerable  as  those  which  this  Act  acknowledges.  But  the  day  is 
twelve  hours  from  March  to  September,  from  daybreak  till  night  for 
the  rest  of  the  year.  It  is  certain  that  fifty  years  before  the  labour- 
day  was  one  of  eight  hours  only,  and  the  wages  paid  were  far  in 
excess  of  what  was  the  statutable  rate  at  the  time. 

There  is  but  little  legislation  of  labour  during  the  reign  of  Henry 
VIII.  His  Acts  remit  the  penalties  on  employers  who  give  higher 
wages  than  the  statute  allows,  and  re-enact  the  rates  which  his 
father's  law  had  prescribed.  By  7  Hen.  VIII.  cap.  5,  labourers  in 
London  are  exempted  from  the  Statute  of  Labourers,  and  by  28  Hen. 
VIII.  cap.  5,  no  corporation  or  company  was  allowed  to  restrain 
apprentices  when  their  time  was  up  from  trade,  or  to  exact  more' 
than  such  legal  fees  for  their  freedom  as  were  permitted  under 
existing  laws. 

I  am  sensible  that  the  recital  which  I  have  made  of  these  ancient 
laws  is  dry  and  dull.  But  you  cannot  study  the  history  of  any 
civilized  country  to  any  profit  without  taking  note  of  its  laws,  still 
less  that  of  England,  in  which  the  course  of  legislation  seems  to  be 
so  much  a  matter  of  compromise  and  immediate  expediency,  but  in 
which,  it  is  therefore  more  immediately  connected  with  its  history, 
least  of  all  in  the  economical  interpretation  of  history,  where  law 
is  to  the  social  state  what  chronology  and  geography  are  to  the 
political  estimate  of  a  nation.  During  all  this  time  the  mass  of 
English  labourers,  by  no  means  claiming  more  than  the  reasonable 
reward  for  their  services,  were  thriving  under  their  guilds  and  trade 
unions,  the  peasants  gradually  acquiring  land,  and  becoming  the 
numerous  small  freeholders  of  the  first  half  of  the  seventeenth 
century,  the  artisans  the  master  bands  in  their  craft,  contractors  in 
the  same  period  for  considerable  works,  planning  the  solid  and  hand- 
some structures  in  what  is  known  of  the  Perpendicular  style,  and 
withal  working  with  their  own  hands  on  the  buildings  which  their 
shrewdness  and  experience  had  planned.  It  is  true  that  at  the  very 
best  age  of  the  workman  a  ruin  was  impending,  the  causes  of  which 
1  have  been  able  to  collect,  and  shaU  now  proceed  to  expound. 


EENEY  VIIL,  HIS  HABITS.  86 

Dnring  the  whole  of  English  history,  there  never  was  a  sovereign 
so  outrageously  and  wantonly  extravagant  as  Henry.  He  inherited 
an  enormous  fortune  from  his  thrifty  father,  as  fortunes  in  the 
sixteenth  century  went,  and  dissipated  it  speedily.  His  wars  and 
alliances  in  which  'subsidized  the  needy  Emperor  of  Germany,  and 
was  baffled  and  foiled  in  all  which  he  undertook  cost  him  much, 
but  his  expenditure  during  time  of  peace  was  prodigious.  He  had 
twenty  or  thirty  palaces,  on  all  of  which  pulling  down  and  building 
was  perpetually  going  on,  in  which  an  army  of  workmen,  often  by 
night  and  day,  on  Sundays  and  on  the  highest  festivals  of  his 
Church,  were  incessantly  employed.  The  cost  of  his  establishments 
was  enormous.  He  seemed  to  have  an  idea  that  it  was  splendid 
and  safe  to  entertain  his  nobles,  and  he  made  them  quarter  them- 
selves on  his  numerous  palaces.  The  establishment  of  Mary,  till 
he  disowned  her,  of  the  infant  Elizabeth,  of  the  infant  Edward  was 
each  more  costly  than  the  whole  annual  charge  of  his  father's  living, 
as  the  extant  wardrobe  books  testify.  He  built  huge  ships  which 
would  not  sail,  huge  palaces  which  were  the  whims  of  the  hour,  and 
were  soon  left  to  decay.  If  he  could  have  got  at  it,  he  would  have 
spent  all  the  private  wealth  of  all  his  subjects,  and  he  made  every 
effort  to  get  at  it.  Whatever  he  procured,  borrowed,  raised  was 
soon  like  the  bag  of  gold  which  Bunyan,  in  his  vision,  saw  poured 
into  the  lap  of  Passion.  He  was  popular  in  a  way,  for  wasteful 
people  generally  are,  even  when  they  waste  what  does  not  belong  to 
them. 

The  smaller  monasteries  went,  and  he  soon  came  to  an  end  of 
their  accumulations.  The  larger  ones  he  spared,  declaring  them  to 
be  the  seats  of  piety  and  religion.  He  pledged  himself  that  the 
spoil  of  the  monasteries  given  him,  he  would  ask  his  people  for  no 
more  taxes,  not  even  for  necessary  wars.  Soon  the  greater  monas- 
teries went.  I  believe  that,  foreseeing  the  storm,  the  monks  had 
granted  long  leases  of  the  lands,  so  that  much  of  his  plunder  was 
reversionary.  But  the  accumulated  treasures  of  ages  came  into  his 
clutches.  A  long  array  of  waggons  carried  off  the  gold,  silver,  and 
precious  stones,  which  for  nearly  four  centuries  had  accumulated 
round  the  shrine  of  Becket.  This  shrine  was  no  doubt  the  richest 
in  England,  perhaps  in  Christendom.  But  there  were  others  more 
ancient  and  nearly  as  wealthy,  at  Winchester,  at  Westminster,  at  a 


86        LEGISLATION  ON  LABOUB  AND  ITS  EFFECTS. 

hundred  sacred  places.  It  is  exceedingly  probable  that  the  accumu- 
lations of  these  holy  places  were,  as  bullion,  equal  to  all  the  money 
in  circulation  at  the  time.  It  vanished  hke  snow  in  summer. 
Nothing  stayed  with  him  apparently  for  a  longer  time  than  he 
could  hurl  it  away.  The  lands  of  the  monasteries  were  said  to 
have  been  a  third  of  the  English  soil. 

After  these  exploits  he  seems  to  have  hardly  dared  to  ask  bis 
people  for  money.  But  there  still  remained  a  way  in  which  he 
could  most  effectually  attack  their  pockets.     He  began  to  issue  base 

^  money,  at  first  with  very  little  alloy  beyond  what  had  been  cus- 
tomary. He  soon  became  shameless,  for  his  mint  kept  issuing 
baser  and  baser  coins.  He  is  the  only  English  sovereign  who  has 
ever  committed  this  peculiarly  mean  and  treacherous  crime,  for 
Charles  only  thought  of  it.  I  reckon  the  continuance  of  this  vile 
practice  under  his  son  as  his  act,  tor  he  had  the  credit  of  breeding 
and  bringing  up  the  infamous  -knaves  whom  he  appointed  as  his 
son's  guardians.  At  last,  when  the  wretch  was  sinking  into  his 
grave,  worn  out  by  his  vices  and  debaucheries  at  a  comparatively 
early  age,  bloated  and  shamefully  diseased,  he  bethought  himself 
of  robbing  the  labourers  and  artisans,  by  confiscating  their  guild 
lands.  He  would  have  confiscated  all  the  property  of  the  univerfei- 
ties  had  he  lived,  but  fortunately  Mr.  Froude's  patriot  king  died, 
the  Vitellius  and  Nero  of  English  history. 

The  mischief  begun  by  Henry  was  continued  by  the  guardians 
of  his  son.     It  is  impossible  to  speak  with  too  much  contempt  of 

/  the  crew  whom  Henry  left  to  watch  over  and  advise  the  young 
prince.  Bad  men,  especially  bad  men  to  whom  the  interests  of 
nations  are  entrusted,  make  their  instruments  worse.  The  chief 
of  the  gang  was  Somerset,  who  soon  got  rid  of  his  brother  Seymour 
at  Tower  Hill.  Somerset  completed  the  confiscation  of  the  guild 
lands  which  Henry  contemplated.  By  a  political  law  that  in  such 
a  time  the  greatest  villain  gets  the  mastery,  Northumberland  got 
Somerset  out  of  the  way,  and  for  a  time  seemed  master.  He  was 
on  the  point  of  dismembering  England  and  creating  for  himself  a 
principality  or  kingdom  north  of  the  Trent  when  Edward  died  ;  the 
angry  and  impoverished  labourers  rallied  to  Mary  Tudor,  and 
Northumberland  fell.  On  the  scaffold  he  added  one  more  vice  to 
his  catalogue,  for  he  pretended  to  repent.     But  he  was  so  bad  a 


THE  POVEBTY  OF  ELIZABETH.  87 

man  that  it  may  be  doubted  whether  hypocrisy  could  have  made 
him  worse. 

When  Elizabeth  came  to  the  throne  both  sovereign  and  people 
were  miserably  poor.  The  base  money  had  driven  the  working 
classes  to  beggary,  and  England,  once  the  most  powerful  of  Western 
States,  was  of  little  more  account  in  the  poHcy  of  Europe  than  a 
petty  German  princedom  was.  The  queen's  first  task  and  first  duty 
was  to  reform  the  currency.    But  she  could  not  afford  to  make  good 

her  father's  and  brother's  dishonesty.     It  would  have  cost  her  five   [ 

years  of  her  revenue.  The  details  of  Henry's  crime,  and  the  details 
of  Elizabeth's  remedy,  I  must  postpone  till  I  deal  with  the  question 
of  metallic  currencies  in  England.  It  was  necessary  that  I  should 
say  as  much  as  I  have  said  in  order  that  we  may  have  light  where- 
with to  foUow  the  fortunes  of  the  English  labourer.  His  guild 
lands,  the  benefit  societies  of  the  Middle  Ages,  which  systematically 
reHeved  destitution,  were  stolen  by  the  greedy  leader  of  the  new 
aristocracy,  he  had  suffered  eighteen  years'  experience  of  a  debased 
currency,  prices  rose  160  per  cent.,  and  the  wages  of  labour  were 
almost  stationary.  Wages  do  not  rise  with  prices.  To  assert  that 
they  do,  or  will,  is  either  ignorance  or  dishonesty.  During  the  few 
years  which  followed  on  the  great  American  Civil  War,  and  a  crew 
of  sharpers,  among  other  dishonest  actions,  had  insisted  on,  and  for 
a  time  maintained,  an  inconvertible  paper  currency,  the  condition 
of  workmen  in  the  United  States  was  very  distressful.  But  it  was  "^ 
not  so  bad  as  the  condition  of  the  working  classes  was  in  England 
after  the  great  queen's  accession  in  1558.  There  were  people  at 
that  time  wLo  wished  to  continue  the  circulation  of  base  money,  as 
they  made  a  large  profit  on  discounting  it.  In  the  American  case 
an  Englishman,  seated  as  an  economist  in  an  academical  office,  was 
tempted,  because  his  vanity  was  flattered,  to  defend  the  practice  of 
the  Wall  Street  junto  of  soft  money  gamblers.  In  the  days  of  the 
English  base  money.  Sir  Thomas  Gresham,  financial  agent  of  the 
English  court  at  Antwerp,  formulated  the  law  which  has  sub- 
sequently gone  by  his  name,  that  if  two  kinds  of  money  declared 
by  authority  to  be  of  equal  value,  but  discovered  in  the  course  of 
trade  to  be  of  unequal  value,  are  put  into  circulation  simultaneously, 
the  over-valued  money  will  speedily  drive  that  which  is  under-valued 
out  of  circulation. 


38        LEGISLATION  ON  LABOUB  AND  ITS  EFFECTS. 

After  reforming  the  currency,  Elizabeth  and  her  advisers  passed 
a  new  Statute  of  Labourers.  In  the  Statute  Book  it  is  known  as 
5  Eliz.  cap.  4.  It  began  by  repealing  all  the  statutes  which  had 
regulated  labour  since  23  Edward  III.,  over  two  centuries  before. 
It  then  took  all  that  was  most  stringent  from  the  statutes  which 
I  have  already  referred  to,  and  put  them  into  a  comprehensive 
enactment,  which  was  hereafter  to  regulate  the  relations  of  em- 
ployer and  labourer.  I  do  not  indeed  believe  that  Elizabeth  and 
her  counsellors  intended  to  deal  unjustly  by  the  workmen ;  some 
indeed  of  the  clauses  of  the  Act  are  intended  for  the  working  man's 
protection,  but  the  mischief  of  the  Act  was  in  the  machinery  by 
which  it  would  be  carried  out,  and  in  the  terribly  depressed  condi- 
tion of  the  labourer.  He  was  handed  over  to  the  mercy  of  his 
employer  at  a  time  when  he  was  utterly  incapable  of  resisting  the 
grossest  tyranny.  The  Government  of  the  day  probably  remem- 
bered the  uprisings  of  Tyler  and  Cade,  certainly  that  of  Ket,  and 
they  determined  to  make  use  of  an  instrument,  the  justices  in 
quarter  sessions,  who  would  be  able  to  check  any  dincontent,  even 
the  discontent  of  despair,  and  might  be  trusted,  if  necessary,  to 
starve  the  people  into  submission.  We  shall  see  how  completely 
success  attended  their  efforts. 

In  certain  employments  servants  were  to  be  hired  by  the  year. 
Every  unmarried  person  under  the  age  of  80,  and  not  having  40s. 
a  year  of  his  own,  nor  otherwise  employed,  was  compellable  to 
serve  at  a  yearly  hiring  in  the  craft  to  which  he  was  brought  up. 
You  will  note  here  that  the  limit  of  private  income,  the  old  franchise 
of  Henry  VI.'s  law,  suggests  that  the  framers  of  the  statute  are  of 
opinion  thac  the  old  prices  would  recur,  and  that  calling  a  coin  a 
shilling,  when  it  only  contained  about  the  third  of  a  shilling,  would 
enable  it  to  buy  as  much  as  when  it  was  three  times  its  present 
weight.  The  servant  hired  for  a  year  could  not  be  dismissed  except 
upon  cause  allowed  by  two  justices,  nor  at  the  end  of  the  year  with- 
out a  quarter's  notice.  Next,  all  persons  between  the  ages  of  15 
and  60,  and  not  ot'nerwise  employed  or  apprenticed,  were  made 
liable  to  serve  in  husbandry.  Masters  unduly  dismissing  their 
servants  were  to  be  fined  40s.,  and  servants  unlawfully  quitting 
their  employment  were  to  be  imprisoned.  Servants  were  not  to 
quit  city  or  parish  without  a  testimonial,  if  they  do  so  they  are  to 


r1 


THE  ELIZABETHAN  STATUTE  OF  LABOVREBS.      39 

be  imprisoned,  and  if  they  have  a  forged  testimonial  they  are  to  be 
whipped.  Masters  taking  a  servant  witbout  a  testimonial  are  to  be 
fined  £5.  The  hours  of  labour  are  defined,  as  in  earlier  laws,  at 
twelve  hours  a  day  during  the  summer  months,  and  from  daybreak 
to  night  in  the  winter.  Absence  from  work  is  to  be  punished  with 
a  fine  of  a  penny  an  hour.  A  strike  is  to  be  visited  with  a  month's 
imprisonment  and  a  fine  of  £5,  a  sum  which  appears  to  be  a  blow 
against  what  might  be  surviving  of  the  old  trade  unions. 

The  justices  are  to  hold  a  rating  sessions  (they  generally  held  it 
a  little  after  Easter),  in  which  they  are  to  fix  the  rate  of  wages  in 
all  employmjnts,  summer  and  winter,  by  day  or  year,  with  board 
or  without  board.  These  rates  are  to  be  certified  in  Chancery, 
approved  by  the  Privy  Coimcil,  and  proclaimed  by  the  sheriff,  who 
is  to  call  attention  to  the  penalties  in  the  Act.  The  justices  are  to 
be  paid  6s.  a  day  for  their  attendance,  and  those  who  are  absent 
from  the  rating  sessions  are  to  be  fined  £10.  The  penalty  on  giving 
higher  wages  than  the  scale  is  £5  and  ten  days'  imprisonment,  on 
the  receiver  twenty-one  days,  the  contract  being  declared  void. 
Workmen  assaulting  a  master  are  to  be  imprisoned  for  a  year  or 
more.     Artificers  may  be  compelled  to  do  harvest  work. 

Workmen  are  allowed  to  migrate  from  county  to  county  in 
harvest  time.  Women  between  twelve  and  forty  years  old,  if 
single,  can  be  compelled  to  work  by  the  year,  week,  or  day,  at  the 
option  of  the  hirer,  and  certain  percons  are  allowed  to  take  appren- 
tices in  husbandry.  Householders  in  towns  may  take  apprentices 
for  seven  years  terms,  and  each  may  have  two,  if  they  be  children 
of  artificers,  and  an  artisan  may  have  as  an  apprentice  the  son  of  a 
person  who  has  no  land.  The  apprenticeship  must  be  for  seven 
years,  under  a  penalty  of  40s.  a  month  for  all  the  period  short 
of  this  time.  But  merchants  are  not  to  take  apprentices,  except 
from  parents  having  40s.  a  year  in  freehold  land,  and  in  certain 
specified  callings,  notably  in  the  trade  of  woollen  cloth  weaving, 
unless  they  possess  a  freehold  of  £3  a  year.  One  journeyman  must 
be  hu-ed  with  every  three  apprentices,  and  if  more  than  three  are 
indentured,  one  journeyman  to  each  additional  apprentice.  But 
persons  refusing  to  be  apprenticed  are  to  be  imprisoned.  Eunaways 
are  to  be  imprisoned. 

The  justices  are  to  inquire  periodically  into  the  execution  of  the 


40        LEGISLATION  ON  LABOTJB  AND  ITS  EFFECTS. 

Act,  and  to  revise  their  rates  according  to  the  cheapness  or  deamess 
of  the  necessaries  of  life.  The  Act  further  recognizes  the  common 
informer,  who  is  to  have  half  the  penalties,  the  other  half  going 
to  the  Crown.  Thirty-three  years  later  the  Act  was  amended.  The 
liabilities  of  the  Act  were  extended  to  weavers,  the  justices  were 
empowered  to  issue  their  rates  in  divisions  of  the  shires,  and  the 
rates  are  to  be  published  bv  the  sheriff,  but  the  obligation  of  cer- 
tifying them  to  the  Privy  Council  through  Chancery  is  abrogated. 
They  are  henceforth  to  be  presented  by  the  Custo  Eotulorum.  As 
was  commonly  the  custom  at  that  time,  the  Act  was  temporary, 

^but  was  constantly  renewed  in  the  last  chapter  of  the  Parliamentary 
roll.     Thus  it  was  re-enacted  in  1601  and  1603.     Lt  all,  between 
28  Edward  I.  and  1  James,  thirty-seven  Labour  Acts  were  passed 
-mji)y  Parliament. 

The  justices  soon  set  to  work.     The  first  assessment  extant  is 
dated  June  7,  1563,  and  is  for  the  county  of  Eutland.    The  original 

^  is  in  the  great  collection  of  Elizabeth's  proclamations,  a  volume 
that  certainly  .belonged  to  Burghley  and  his  son  Eobert  Cecil,  after- 
wards Earl  of  Salisbury.  This  assessment  was,  I  make  no  doubt, 
to  be  a  guide  for  counties  south  of  the  Trent,  as  one  of  1595,  and 
also  printed  in  the  same  collection,  is  for  those  which  are  north  of 
the  Trent.     Altogether  I  have  found  thirteen  of  these  assessments 

*  between  the  years  1563  and  1725.  I  believe  that  they  were  dis- 
continued during  the  eighteenth  century,  not  because  the  law  was 
neglected,  but  because  the  assessment  had  effectually  done  the  work 
for  which  it  was  designed,  the  labourer's  wages  being  now  reduced 
to  a  bare  subsistence. 

The  object  of  this  celebrated  or  infamous  statute  was  threefold — 

.  (1)  to  break  up  the  combinations  of  labourers,  (2)  to  supply  the 
adequate  machinery  of  control,  and  (3)  by  Hmiting  the  right  of 
apprenticeship,  to  make  the  peasant  labourer  the  residuum  of  all 
other  labour,  or,  in  other  words,  to  forcibly  increase  the  supply.  The 
courts  of  law,  if  the  justices  were  slow  to  act,  could  be  quite  relied 
on  for  enforcing  the  statute,  for  the  most  prejudiced  lawyer  cannot 
deny  that  the  Stuart  judges  were,  with  some  exceptions,  timid, 
servile,  and  cruel  Attempts  have  been  made  to  argue  that  the 
Stuart  kings  wished  to  rule  strictly  by  law.  But  their  apologists 
forget  that  law  is  no  abstract  proposition,  but  a  highly  practical 


THE  OBJECTS  OF  THE  STATUTE,  41 

condition  of  social  life,  and  that  procedure  is  as  much  law  as 
the  penalties  which  a  statute  enacts,  and  the  rights  which  law 
professes  to  guarantee.  To  keep  to  the  letter  of  the  law  and  corrupt 
its  procedure,  is  a  far  greater  treason  again^  law  and  freedom  than 
it  is  to  enact  a  law  of  Draconian  severity.  Now  the  Stuarts  made 
the  judge's  patent  run  during  the  pleasure  of  the  Crown,  and  gave 
the  judge  abundant  warnings  that  they  would  be  ejected  from  office 
if  their  rulings  or  interpretations  of  law  displeased  authority.  It 
was  from  this  point  of  view,  I  venture  to  affirm  the  true  one^  that 
the  answer  of  the  aged  Serjeant  Maynard  was  made  to  Wilham  IIL 
"  You  must  have  outlived  all  the  lawyers,"  said  the  king.  "  Yes, 
sir,"  he  replied,  "  and  if  your  Majesty  had  not  come  hither,  I  should 
have  outHved  all  the  law."  But  the  Stuarts  did  not  repeal  laws, 
they  only  perverted  their  administration  by  the  hands  of  wicked 
judges.  They  did  not  even  punish  Chief  Justice  Vaughan  for 
affirming  the  immunity  of  juries.  At  last  the  judges  got  freeholds 
in  their  offices,  and  became  incomparably  more  honest. 

The  justices  in  quarter  sessions  took  no  note,  aa  tlf^e  statute 
instructed  them,  of  **the  cheapness  or  deamess  of  provisions." 
Their  object  was  to  get  labour  at  starvation  wages,  and  they  did 
their  best  to  effect  their  object.  The  law  gave  them  the  power,  and 
provided  no  appeal  from  their  decision.  It  may  be  said  that  the 
framers  of  the  statute  imagined  that  the  magistrates  could  adopt  a 
sliding  scale,  like  that  which  was  evidently  contemplated  under  25 
Edward  III.,  and  as  evidently  was  before  the  mind  of  ParHament  when 
it  framed  its  own  scales  in  the  fifteenth  century,  particularly  in  1495. 

Some  time  since,  in  a  work  of  mine,  entitled,  "  Six  Centuries  of 
Labour  and  Wages,"  my  information  as  to  the  amount  of  wages  paid 
and  the  price  of  food  having  been  far  less  copious  than  it  now  is, 
I  was  able  to  show  that  while  the  Act  of  1495.  enabled  an  artisan, 
in  prices  of  that  time,  to  procure  a  certain  amount  of  food  and  drink 
with  a  fortnight's  labour,  at  the  rates  of  the  statute,  and  an  agri- 
cultural labourer  to  obtain  the  same  with  three  weeks'  labour,  the 
justices'  assessment  rarely  enabled  the  peasant  to  obtain  the  same 
quantities  with  a  whole  year's  labour,  and  would  sometimes  have 
required  two  years'  incessant  labour.  For  it  must  be  remembered 
that  though  the  law  pressed  hardly  on  the  artisan,  it  was  intended 
to  press  far  more  hardly  on  the  peasant,  cheap  agricultural  labour, 


42        LEGISLATION  ON  LABOUB  AJSD  ITS  EFFECTS. 

in  the  absence  of  any  notable,  as  I  shall  show  hereafter,  any  possible 
improvement  in  the  art  of  agriculture,  being,  as  was  seen  clearly 
enough,  the  best  means  by  which,  concurrently  with  a  high  price 
of  produce,  agricultural  rents  could  be  raised. 

Now  the  researches  which  I  have  made  subsequently  to  the 
the  publication  of  my  work,  have  abundantly  confirmed  the 
inferences  which  I  drew  as  to  the  intention  of  the  quarter  sessions 
tissessments.  I  have  discovered  more  of  these  documents  than  were 
before  me  a  few  years'  ago,  and  have  been  able  to  trace  the  conse- 
quences of  the  system.  It  is  true  that  in  some  particulars  the 
position  of  the  peasant  was  not  so  bad  as  it  now  is.  He  was  rarely 
without  his  patch  of  land.  The  Allotments  Act  of  31  Elizabeth  cap. 
7,  under  which  an  attempt  was  made  to  check  the  growing  evil  of 
building  cottages  without  curtilages,  which  provided  that  no  cottage 
should  hereafter  be  built,  unless  four  acres  of  land  were  attached  to, 
for  the  peasant  to  work  on  his  own  account,  and  forbad  under 
penalties  that  more  than  one  family  should  inhabit  the  same  tene- 
ment, is,  to  my  mind,  conclusive  as  to  what  had  been  a  practice,  and 
that  the  practice  had  been  recently  abandoned.  I  can  trace  the 
continuity  of  this  practice  and  its  beneficial  effects  during  the  early 
part  of  the  eighteenth  century.  In  the  latter  half  of  this  century, 
the  Act  was  repealed.  Its  duration  was  a  hindrance  t©  the  fashion 
of  enclosures  then  so  prevalent. 

Again,  beyond  the  plot  which  he  held  in  severalty,  the  peasant 
had  more  or  less  extensive  rights  of  common.  The  common,  even 
if  it  did  not  afi"ord  herbage  for  his  cow,  was  a  run  for  his  poultry, 
and  assured  him  the  occasional  fowl  in  the  pot.  When  the  system  of 
enclosures  was  in  full  vigour,  people  commented  on  the  very  different 
treatment  received  by  the  man  who  stole  the  goose  from  the  common 
end  the  man  who  stole  the  common  from  the  goose.  The  gradual 
appropriation  of  these  indirect  advantages,  however  much  the  policy 
of  enclosures  may  have  increased  the  productiveness  of  agriculture, 
was  an  insensible  aggravation  of  the  peasant's  lot,  and  a  cause  of 
increasing  distress  to  him. 

Again,  as  there  were  large  tracts  of  open  and  swampy  country, 
the  England  of  two  and  more  centuries  ago  swarmed  with  wild 
animals.  From  the  earliest  times  of  which  we  read,  some  of  these 
animals  were  protected  for   private  amusement  or  consumption, 


INDIRECT  BESOUBCES  OF  LAB0VBEB8.  43 

as  stags  and  deer,  hares  and  wild  boars.  In  later  times, 
especially  in  James  the  First's  reign,  game  laws,  restraining  the 
practice  of  sporting,  on  the  plea  that  the  practice  of  fowling  and 
snaring  made  the  labourers  idle,  were  enacted.  But  it  is  certain  that 
the  laws  were  inoperative.  I  have  examined  many  accounts  of  the 
sixteenth  and  seventeenth  centuries,  which  register  the  domestic  ex- 
penditure of  several  noblemen  of  rank  and  fortune,  and  of  corpora- 
tions. The  amount  of  game,  winged  and  ground,  which  is  bought, 
especially  in  winter,  is  prodigious.  Many  purchases  are  made  of 
birds  which  are  not,  I  believe  generally  found  on  tables  now.  But 
if  the  sole  right  of  netting  and  fowHng  had  been  reserved,  as  the 
statute  of  James  prescribes,  these  items  could  not  have  appeared 
in  the  accounts.  They  were  doubtlessly  supplied  by  the  small  farmers 
and  peasantry.  Now,  what  they  sold  at  the  great  house,  they  might 
have  consumed  themselves. 

These  advantages  which  one  discovers  by  studying  the  social 
legislation  and  habits  of  the  time,  existed  to  an  equal  or  a  greater 
extent  in  the  time  of  the  first  Tudor  sovereign.  It  is  the  gradual 
deprivation  of  them,  without  any  compensation  beyond  the  conces- 
sion of  a  bare  subsistence  which  marks  the  economical  history  of 
the  poor  as  the  centuries  pass  on.  It  is,  I  think,  most  probable 
that  the  practice  of  the  quarter  sessions  assessment  ceased  in  the 
south  of  England  at  the  close  of  the  seventeenth  century,  and  in  the 
north  at  the  beginning  of  the  eighteenth.  It  would  be  strange  if 
the  practice  was  continued,  while  agricultural  history,  now  getting 
full  of  comments  on  the  situation,  is  entirely  silent  on  the  subject. 
But,  m  fact,  the  justices  had  done  their  work.  They  had  made  low 
wages,  famine  wages,  traditional,  and  these  wages,  insufficient  by 
themselves,  were  supplemented  from  the  poor  rate. 

We  have  an  account  or  return  of  the  poor  rates,  actually 
collected  and  expended  in  every  English  county,  at  the  end  of 
Charles  the  Second's  reign.  Its  heaviest  incidence  is  in  the 
counties  south  of  the  Trent.  The  sum,  to  our  modern  experi- 
ence, is  hardly  a  tenth  of  that  now  raised  and  expended 
in  England  and  Wales.  But  this  gives  an  inadequate  idea 
of  its  character.  It  is  in  amount  more  than  a  third  of  the 
whole  revenue  in  time  of  peace.  If  the  money  expended  for 
the  relief  of  the  poor  in  the  present  day  stood  in  the  same 


44        LEGISLATION  ON  LABOVB  AND  ITS  EFFECTS. 

ratio  to  the  public  expenditure,  interest  on  debt  being  not 
reckoned  in  the  revenue,  it  would  reach  nearly  twenty  millions. 
In  fact,  the  estimate  which  Gregory  King  makes  of  an  agricul- 
tural labourer's  income  at  the  end  of  the  seventeenth  century, 
and  I  know  from  actual  payments  made  and  wages  earned,  that 
V  King's  estimate  is  pretty  accurate,  the  income  had  invariably 
to  be  sq^plemented  from  the  poor  rate.  It  is  true  that  King 
exhibits  his  inference  in  a  curious  way.  He  makes  out  that 
the  landowners  and  officials  alone  contribute  to  the  annual 
increase  of  wealth,  because  they  got  the  largest  share,  and  save 
some  of  it,  but  that  the  whole  class  of  labourers  are,  from  the 
^  character  of  their  incomes,  a  burden  on  the  national  resources, 
though  he  was  not  blind  to  the  fact  that  they  made  all  the 
wealth. 

But  there  are  two  facts  on  which  comment  should  be  made. 
The  rate  of  wages  actually  paid  to  workmen  is  always  higher  than 
that  prescribed  by  the  justices.  I  cannot  say,  indeed,  that  the 
wages  which  I  have  registered  were  paid  for  (say)  fifty  weeks  in 
the  year,  but  neither  is  it  certain  that  the  quarter  sessions  rates 
by  the  day  are.  Now  I  will  take  eight  different  kinds  of  labour  at 
weekly  rates,  and  strike  an  average  oi  the  eight  from  the  justices* 
assessments,  and  another  from  the  wages  which  I  have  registered 
are  actually  paid  to  the  different  kinds  of  workmen,  five  being 
artisans,  and  three  unskilled  and  agricultural.  The  average  of  the 
justices'  eight  is  5s.  Id.  a  week,  between  1593  and  1684.  The  average 
actually  paid  over  the  same  period,  and  from  the  same  years  in 
which  the  rate  is  published  is  6s.  6d.  The  employer  was  more 
^  merciful  than  the  magistrate. 

The  other  fact  is  that  the  assessments  were  far  more  generous 
duriog  the  Commonwealth  than  they  are  tinder  the  monarchy, 
whether  we  take  the  period  before  that  form  of  government  was 
affirmed  or  after  it.  Even  under  these  circumstances  the  assess- 
ment is  below  the  wages  actually  paid,  though  not  much,  only 
4|d.  in  1651  asnd  2jd.  in  1655.  After  the  Kestoration  the 
magistrates  go  back  to  the  old  scale,  and  prescribe  8s.  a  week  less 
than  was  actually  paid.  The  Puritans  were  perhaps  stem  men, 
but  they  had  some  sense  of  duty.  The  Cavaliers  were  perhaps 
polished,  but  appear  to  have  had  no  virtue    except   what  they 


WAGES  ACTUALLY  PAID.  45 

called  loyalty.    I  think  if  I  had  been  a  peasant  in  the  seventeenth 
century,  I  should  have  preferred  the  Puritan. 

In  1825,  the  whole  of  the  labour  laws  were  swept  away,  chiefly 
by  the  agency  of  the  late  Mr.  Joseph  Hume.  The  early  Statute 
Book  is  full  of  legislation  on  labour.  There  is  no  word  in  Hansard 
of  any  debate  whatever  on  the  abolition  of  the  system.  The 
statute  of  Elizabeth  was  obsolete,  because  it  had  done  its  work, 
and  had  permanently  degraded  the  peasant.  Thenceforward  the 
whole  subject  was  remitted  to  the  common  law,  and  to  the 
dangerous  interpretations  which  judges  have  given  of  what  they 
are  pleased  to  call  constructive  conspiracy,  the  most  elastic  instru- 
ment of  tyranny  which  can  be  devised. 


IIL 

THE  CULTIVATION  OF  LAND  BY  OWNEBS  AND  OCCUPIEES. 

The  consequence  of  agricultural  success — The  Duke  of  ArgylVa 
illustration  of  rent — The  history  of  progress — The  errors  of 
theory — The  history  of  agricultural  produce — The  accuracy  of 
ancient  accounts — Gregory  King's  law  of  prices — English  famines — 
Agriculture  in  the  seventeenth  and  eighteenth  centuries — The 
survey  of  Gamlingay — Common  fields — Pasture — Commons — 
The  regular  clergy  and  agriculture — Primogeniture — The  land 
and  stock  lease — Development  of  new  tenanciest  terms  of  yearsy 
lifCi  and  on  rack-rent. 

The  development  and  progress  of  agriculture  is  the  first  and 
most  convincing  proof  that  a  particular  race  can  rise  above 
barbarism.  It  is  true  that  the  practice  of  agriculture  is  com- 
patible with  and  may  be  characteristic  of  an  unprogressive  stage, 
one  in  which  civilization  is  early  and  strangely  arrested.  But  such 
an  arrested  growth  can  almost  always  be  explained  by  the  presence 
of  definite  causes,  which  it  costs  the  publicist  little  trouble  to 
detect  and  expound. 

1.  The  success  of  agriculture  measures  the  numbers  of  any 
given  community  who,  in  the  absence  of  foreign  importation,  can 
be  maintained  on  the  soil.  When  foreign  importation  is  free  and 
copious,  the  whole  trading  world  must  be  taken  as  one  community, 
and  the  rule  will  be  found  to  apply  with  equal  accuracy.  We  in 
England  do  not  produce,  perhaps  could  not  produce  enough  food 


THE  CONSEQUENCE  OF  AGRICULTURAL  SUCCESS.     47 

from  the  land,  wherewith  to  feed  all  its  inhabitants,  though  this 
inability,  for  reasons  which  will  be  given  further  on,  is  disputable. 
But  as  it  is  we  draw  our  supplies  from  various  parts  of  the  world, 
not  a  little  of  that  which  we  import  being  in  liquidation  of 
liabilities  which  foreign  nations  or  our  own  colonies  have  con- 
tracted with  their  English  creditors.  If  by  any  ill-advised  act  we 
should  check  the  imports  of  these  countries,  we  should  ruin  them, 
or,  what  is  more  probable,  compel  them  to  repudiate  their  debts. 
It  is  infinitely  more  dangerous  for  a  free  trade  country  to  reverse 
its  policy,  than  it  is  for  one  which  is  protectionist  to  abandon  that. 
To  fall  into  a  vice  is  mischievous,  to  abandon  a  vice  is,  economically, 
progressive. 

2.  The  success  of  agriculture  measures  the  extent  to  which  other 
industries  than  agriculture  can  subsist,  or  generally  other  persons 
besides  agriculturists  can  live.  The  husbandman,  at  least  in  the 
early  stages  of  his  craft,  when  he  is  not  forced  to  occupy  barren 
land,  on  which  he  can  perhaps  by  unremitting  toil  induce  fertility, 
can  even  with  the  rudest  implements  produce  more  than  is 
sufficient  for  the  wants  of  himself  and  his  household.  It  is 
inevitably  the  case,  as  he  is  the  most  defenceless  of  all  workmen, 
that  either  on  pretence  of  defending  him,  or  by  taking  ransom 
from  him  for  abstaining  from  robbing  him,  he  will  have  to  pay 
toll  to  armed  persons  who  constitute  themselves  his  superiors. 
His  labours,  with  more  reason,  supply  the  maintenance  of 
those  whose  industry  affords  him  more  convenient  means  for 
carrying  on  his  calling,  or  relieve  him  from  undertaking  bye- 
employments  when  the  labour  of  the  fields  is  over  or  is  for  a  time 
suspended.  The  success  of  his  industry  is  therefore  of  profound 
interest  to  all,  especially  when  the  home  supply  is  the  entire  or 
principal  source  of  maintenance  to  the  inhabitants  of  any  country. 
Even  when  it  is  not,  the  interest  in  successful  agriculture 
should  still  be  keen,  for  the  agriculture  of  a  country  is  the  chief 
home  market  of  a  country,  and  the  trade  with  one's  own  fellow 
countrymen  is  the  safest  and  least  risky  trade  of  all.  Everything 
therefore,  be  it  law.,  practice,  or  custom,  which  discourages 
agriculture  or  checks  its  development,  is  a  public  nuisance,  however 
venerable  the  law,  practice,  or  custom  may  be.  There  has  been, 
and  there  is,  considerable  discouragement  put  on  agriculture,  and 

TJKIVEKSITY 


48  THE  CULTIVATION  OF  LAND 

it  is  the  duty  of  statesmen,  without  delay,  to  remove,  or  at  least 
to  mitigate,  the  causes  of  this  discouragement. 

S^.  The  success  of  agriculture  is  the  measure  of  rent.     Rent  is 

^^doubledly  the  payment  made  for  the  use  of  a  natural  instru- 
ment, the  use  of  which  is  necessary  to  human  society  —  the 
effectual  and  successful  use  of  which  is  of  profound  interest  to 
human  society^^The  Duke  of  Argyll,  a  great,  perhaps  an  over- 
confident eulogist  of  landowners,  has  compared  the  hire  of 
agricultural  land  to  the  hire  of  a  musical  instrument.  The  com- 
parison is  ingenious  and  not  inaccurate,  but  I  do  not  think  that  the 
Duke  saw  the  full  force  of  his  comparison.  Perhaps  if  he  had,  he 
would  not  have  quoted  it.  Let  us  admit  that  the  hire  of  a  piece  of 
land  is  like  the  hire  of  a  Straduarius  violin.  In  the  hands  of  most 
of  us,  certainly  in  my  hands,  the  rent  I  would  give  for  the  violin 
would  not  be  a  penny  a  year ;  I  could  make  no  profitable  music  by 
it.  But  in  the  hands  of  Herr  Joachim,  the  rent  of  such  an 
instrument  might  be  worth  many  pounds  a  year,  for  he  could  dis- 
course most  excellent  music  by  it.  And  this  is  just  the  case  with 
land.  It  needs  the  skill,  experience,  education,  intelligence  of  the 
occupier.  This  has  been  till  recent  times,  is  in  some  parts  of  the 
United  Kingdom,  of  the  highest  capacity  and  efficiency.  I  have 
studied  the  agriculture  of  Europe  on  the  spot  over  the  greater  part 
of  its  western  countries,  that  of  America  from  the  seaboard  to  the 
Eocky  Mountains,  and  northward  to  the  Great  Lakes.  I  have 
never  seen  any  husbandman  equal  to  the  English  farmer.  But  I 
shall  have  occasion  hereafter  to  dwell  on  this  at  more  length  and 
with  more  precision,  when  I  handle  the  economic  history  of  rent. 

LAJ;.^wesent  I  need  only  say  that  rent  is  the  result  of  two  forces. 
Ordinary  economists  have  generally  dwelt  on  only  the  first  of  them. 
The  one  is  the  natural  powers  of  the  soil,  sometimes  called 
original  and  indestructible,  foolishly  so,  because  one  hardly  can  tell 
what  are  the  original  powers,  and  no  one  can  allege  what  are 
indestructible,  except  it  be  such  as  certainly  do  not  contribute  to 
fertility.  The  other,  and  the  vastly  more  important  one,  is  the 
acquired  capacity  or  skill  of  the  tenant — the  power,  to  revert  to 
the  Duke's  illustration,  of  playing  with  effect  on  the  violin .\  Unfor- 
tunately, the  acquired  capacity  and  skill  of  the  tenant  are  very 
destructible,  and  have  been  destroyed. 


BENT,    TEE  EIST0B7  OF  PBOGBESS,  49 

Economists  tell  us,  inter  aliay  that  they  busy  themselves  with  the 
laws  which  regulate  or  govern  the  production  of  wealth ;  though 
when  they  deal  with  details  they  display  the  grossest  ignorance  about 
the  production  of  the  most  necessary  and  important  of  human 
products,  those  of  agriculture.  [The  laws  which  primarily  govern 
the  production  of  wealth  are  laws  of  nature,  and  by  discovering 
them,  following  and  using  them,  human  industry  confers  utility  on 
matter.ySome  are  obvious  and  simple.  No  husbandman  sows  com  in 
midsummer,  expecting  to  reap  in  midwinter.  The  earhest  artisans, 
miners,  metallurgists  knew  certain  natural  laws,  attention  to  which 
was  essential  to  their  industry.  [But  some  natural  laws  have  only 
been  arrived  at  by  long  observation,  by  profound  study,  by  cautious 
research.  \  The  shortening  of  a  voyage  out  and  home  from  an 
English  port  to  one  in  Hindostan  and  back  again,  from  two  years 
to  four  months,  is  the  result  of  an  infinite  study  of  natural  laws — 
some  gathered  on  the  ocean  itself,  some  in  the  workshop,  some 
in  the  laboratory,  some,  and  these  not  the  least,  in  the  mathe- 
matician's study^  Wrought  iron  cost  in  money  of  the  four- 
teenth century's^  a  ton.  Twelve  is  generally  a  fair  multiple 
for  prices  of  that  time,  taking  one  thing  with  another,  when  we 
compare  them  with  modem  experience.  Why  has  iron  fallen  in 
price  from  £144  to  £4,  but  by  the  discovery  and  adaptation  of 
natural  laws  ? 

[The  production  of  wealth,  then,  is  the  selection  and  adoption  ot 
natural  laws,  through  the  agency  of  human  intelHgence,  which  is 
progressive.  We  cannot  tell  what  are  the  limits  of  human  intelli- 
gence and  consequently  of  its  power.  We  are  amazed  at  what  it 
has  done,  and  cannot  guess  what  it  may  do.  To  have  predicted  a 
century  ago,  that  a  power  would  convey  passengers  over  roads  at 
the  rate  of  sixty  miles  an  hour,  would  have  seemed  as  absurd  as 
the  nocturnal  and  aerial  voyage  of  Borak.  To  have  predicted  that 
the  most  delicate  colours  would  be  procured  from  coal  tar,  and 
flavours  and  essences  from  the  same  material,  would  have  been 
deemed  the  talk  of  a  Bedlamite.  There  are  no  doubt  arid  and 
unprofitable  statements  constantly  made,  such  as  that  men  will 
never  travel  as  fast  as  light,  or  in  organic  chemistry  make  synthesis 
as  easy  as  analysis.  There  is  no  subject  on  which  impossibihties 
have  been  predicted  with  more  unfortunate  assurance  by  economists 

5 


50  THE  CULTIVATION  OF  LAND. 

as  those  on  production,  and  especially  on  agricultural  production 
and  its  congeners. 

\^We^  who  have  to  read  those  books  in  which  the  speculative  element 
obscures  the  practical  side  of  political  economy,  are  treated  to  many 
alarmist  predictions  about  the  margin  of  cultivation,  the  law  of 
diminishing  returns,  and  the  exhaustion  of  fertility,  and  this 
constantly  by  people  who  are  profoundly  ignorant  of  the  practical 
side  of  that  on  which  they  dogmatize.  But£no  one  except  in  a 
general  way  has  ever  discovered  the  margin  of  cultivation,  has  ever 
seen  the  law  of  diminishing  returns  in  operation,  or  has  witnessed 
the  exhaustion  of  fertility.  ^  It  is  because  they  know  nothing  about 
the  facts  that  they  are  so  straugely  and,  at  times,  so  mischievously 
ftonfidenjr  A  As  yet  we  know  that  wheat  will  not  grow  on  a  granite 
rock,  though  if  this  rock  be  disintegrated  it  makes  the  most  fertile 
of  soils,  and  that  you  could  not  on  grounds  of  physical  space  and 
botanical  conditions  grow  150  bushels  of  wheat  to  the  acre,  and 
that  you  can  by  an  indefinite  number  of  croppings  of  a  certain  kind 
extinguish  and  annul  the  indestructible  powers  of  the  soil,  but  no 
one  ever  saw  these  results.  Unfortunately  the  reputation  of  those 
who  talk  and  write  nonsense,  sometimes  induces  most  mischievous 
fallacies  of  practice  on  the  mind  of  those  who  do  not  see  through 
the  nonsense,  and  great  hostility  to  the  professors  and  teachers  of 
a  science  which  men  of  the  world,  who  have  to  interpret  the  system, 
declare  to  be  unpractical  and  intolerable  verbiage. 

I  do  not  indeed  purpose,  in  this  lecture,  to  deal  with  the  econo- 
mical history  of  rent.  The  treatment  of  this  most  important  fact, 
in  what  economists  call  the  laws  which  govern  the  distribution  of 
wealth,  will  be  reserved  for  a  subsequent  occasion,  for  I  hope  that 
we  shall  be  able,  as  I  go  on  with  these  several  subjects,  to  proceed 
from  what  I  may  call  the  general  treatment  of  economical  history 
to  those  concrete  cases,  in  the  true  interpretation  of  which  such 
serious  consequences  are  involved,  and  such  necessary  appeals  are 
made  to  the  interposition  of  law.  For  as  the  laws  which  govern 
the  distribution  of  wealth,  by  which  an  economist  means  the  share 
which  each  person  in  the  great  industrial  partnership  receives,  are 
merely  or  mainly  of  human  origin,  it  is  plainly  part  of  the  functions 
of  the  statesman  to  remedy  any  injustice  which  may  be  traced  to 
this  adventitious  origin,  to  determine  what  contracts   should   be 


THE  ERBOBS  OF  THEOBY.  61 

permitted,  and  the  extent  to  which  contracts,  which  may  be  condi- 
tionally permitted,  shall  be  practically  enforced. 

This  much  I  ought  to  say  here.  [Eent,  as  Adam  Smith  did  not 
see,  and  he  may  well  be  pardoned  for  not  seeing  it,  is  not  a  cause  of 
value,  but  a  consequent  of  value.  It  is  because  agricultural  and 
analogous  produce  fetches  more  in  the  market  than  it  cost  to  pro- 
duce, outlay  and  average  profit  considered,  that  rent,  i.e.,  economical 
rent,  arises^Hence,  if  we  admit,  as  we  must  by  the  fact  that  every 
producer  seeks  to  obtain  the  maximum  result  with  the  least  possible 
expenditure  of  nervous  and  muscular  energy,  personal  or  supple- 
mentary as  the  case  may  be — and  economical  labour  is  not  in  itself 
a  desirable  thing — it  necessarily  follows  that  the  ideal  of  the  econo- 
mist would  be  a  state  of  things  in  which  the  produce  necessary  for 
human  hfe  could  be  obtained  so  regularly,  so  readily,  and  with  so 
little  labour,  and  consequently  so  cheaply,  that  no  rent  could  arise. 
I  cannot  dispute  the  claim  of  the  landowner  to  the  rent  which  he 
receives.  I  think  that  the  theory  which  would  deprive  him  of  it  by 
law  is  unjust  and  odious.  I  hold  that  to  have  bought  him  out, 
when  Mr.  Mill  first  ventilated  the  doctrine  of  the  unearned  incre- 
ment would  have  been  ruinous,  as  I  insisted  to  that  distinguished 
person  that  it  would  have  been  when  he  advocated  it ;  and  as  for 
the  nationahzation  of  land,  by  which  I  suppose  is  meant  the  violent 
acquisition  of  it  by  the  State,  I  must  have  a  far  better  idea  of  any 
human  administration  than  I  have  ever  been  able  to  form,  before  I 
hesitate  to  conclude  that  such  an  expedient  would  be  the  beginning 
of  a  series  of  perpetual  and  nefarious  jobs.  Land  was  nationalized 
under  the  Eoman  KepubUc,  and  we  all  know  what  became  of  it,  and 
of  the  Eoman  Kepublic  too. 

If  I  have  made  myself  at  all  clear  you  will  conclude  thatUhe 
fortunes  and  history  of  English  agriculture  are  the  key  to  the  [^ 
interpretation  of  the  gravest  social  questions  which  have  arisen  in 
English  economical  history,  probably  of  the  present  situation, 
possibly  of  difficulties  in  the  near  future.  For  it  cannot  be  too  often 
remembered  and  inculcated  that  we,  in  the  present  day,  are  not  only 
the  descendants  of  an  ancient  nation,  with  a  long  and  connected 
history,  but  that  we  inherit  the  consequences  of  the  foUy  as  well  as 
of  the  wisdom  of  our  ancestry,  and  are  what  we  are  by  virtue  of 
causes  which  have  had  an  historical  beginning,  and  in  some  cases 


52  THE  CULTIVATION  OF  LAND. 

an  enduring  influence.  Not  only  is  this  the  case,  but  the  analyst 
economic  history  soon  discovers  that  efl^ects  endure  after  causes 
have,  to  all  appearance,  wholly  passed  away;l  and  that  he  is  con- 
strained, if  he  makes  an  adequate  interpretation  of  the  present 
situation,  to  modify  the  ancient  maxim,  Cessante  causa,  cessat  efectus. 
In  my  last  lecture  I  illustrated  this  fact  very  fully  by  showing  that 
the  quarter  sessions  assessments  had  an  enduring  influence  on  the 
conditions  of  labour  long  after  they  were  disused  and  forgotten.  In 
the  course  of  this  inquiry  we  shall  have  cumulative  evidence  of  the 
same  facts,  or  of  facts  similar  to  them. 

Now  there  are  certain  historical  facts  which  have  had  from  time 
to  time  great  influence  on  the  progress  of  English  agriculture. 
Such,  to  take  some  of  its  principal,  are  the  great  change  in  the 
occupancy  of  land  after  the  middle  of  the  fourteenth  century,  on 
which  I  have  already  made  certain  comments,  the  singular  exhibi- 
tion of  agricultural  prosperity  in  the  fifteenth,  the  change  of  owner- 
ship, after  the  dissolution  of  the  monasteries,  and  the  great  extension 
of  sheep-farming  in  the  sixteenth,  the  development  of  rack-renting 
in  the  seventeenth,  and  the  enclosures  and  experimental  husbandry 
of  the  eighteenth.  I  do  not  know  whether  I  shall  have  opportunity 
on  the  present  occasion  to  refer  to  the  remarkable  reaction  of  the 
nineteenth,  and  in  particular  to  the  existing  condition  of  agriculture. 
I  shall  have  to  make  reference  to  most  of  these  facts  in  my  lecture  of 
to-day,  and  perhaps  the  best  and  most  obvious  way  in  which  to 
make  them  clear  is  to  give  you  the  information  which  I  have  been 
able  to  collect  as  to  the  rate  of  production  at  different  epochs  of 
agricultural  history. 

Now  in  1333-6,  by  which  I  mean  on  this  occasion,  four  years, 
though  the  document  contains  part  of  six  years »  Merton  College  in 
Oxford  had  a  return  made  to  the  fellows  of  the  seed  sown,  and  the 
produce  threshed  on  ten  of  their  estates,  all  these  lands  being  in  their 
own  hands,  cultivated  by  their  own  capital,  and  under  the  superin- 
tendence of  their  own  bailiffs.  Wheat  is  not  grown  on  all  the 
estates  in  every  one  of  the  four  years,  but  it  is  so  generally,  that  I 
am  sure  the  omission  points  to  a  fallow.  The  largest  breadths  are 
sown  the  best  land.  Now  the  average  produce  in  cheap,  that 
is,  abundant,  years,  as  all  these  years  are,  is  nine  bushels  of  wheat 
and  fifteen  of  barley,  the  seed  being  two  bushels  of  the  former  and 


THE  EISTOBY  OF  AOBICULTUBAL  PBODUCE,         63 

four  of  the  latter  grain.  This  produce  is  therefore  in  excess  of  the 
average,  and  the  oldest  writer  on  English  agriculture,  Walter 
de  Henley,  expressly  states  that,  unless  the  farmer  reaps  full  six 
bushels  an  acre,  he  is  cultivating  at  a  loss,  giving  reasons  for  his 
estimate.  This  series  of  four  years'  produce  precedes  the  great 
change  in  occupancy  which  I  referred  to  as  occurring  in  the  middle 
of  the  fourteenth  century,  and  as  consequent  on  the  plague. 

The  next  account  of  production  to  which  I  invite  your  attention 
is  one  of  after  the  middle  of  the  fifteenth  century.  It  is  at  Adisham, 
in  Kent,  between  Canterbury  and  Dover,  and  presumably  therefore 
a  favourable  specimen  of  agriculture.  Here  the  produce  of  wheat 
is  twelve  bushels,  of  barley  sixteen,  of  peas  and  vetches  eight,  and 
of  oats  twenty.  The  year  is  abundant,  and  prices  are  below  the 
average.  In  1655  Hartlib  tells  us  that  the  average  production  of 
wheat  was  from  twelve  to  sixteen  bushels  an  acre,  but  Gregory 
King,  about  1693,  says  that  the  produce  for  all  kinds  of  grain  was 
not  more  than  a  dozen  bushels.  I  think  that  King  has  given  a  more 
correct  estimate  than  Harthb  has,  whose  experience  was  to  some 
extent  of  the  new  agriculture.  In  the  early  part  of  the  eighteenth 
century  the  rate  all  round  was  certainly  twenty  bushels,  and  perhaps 
a  little  more. 

Now  from  these  and  similar  facts,  for  I  am  only  giving  you  a 
specimen,  I  concluded  that  the  average  wheat  produce  of  England  and 
Wales,  from  the  accession  of  Edward  III.  to  the  end  of  the  sixteenth 
century,  could  not  have  been  more  than  two  and  a  half  millions  of 
quarters,  and  that  the  population  was  as  numerous  as  the  quarters, 
for  in  those  days  wheaten  bread  was  the  food  of  the  people  all 
through  England,  and  there  was  little  else  that  could  be  used  in 
substitution  for  it,  since  winter  roots  were  unknown.  This  in- 
ference of  mine  was  practically  confirmed  by  one  of  the  poll  taxes 
of  the  fourteenth  century,  which  is  virtually  a  census,  and  gives 
the  same  amount,  and  by  an  actual  census  of  certain  hundreds  of 
Kent  in  the  sixteenth  century,  where  the  same  conclusion,  when 
a  contrast  is  made  with  the  present  population,  is  distinctly 
arrived  at. 

I  have  already  mentioned  that  the  distribution  of  land  was  very 
general,  most  persons  holding  a  Httle  farm,  and  the  poorest  a  decent 
curtilage.    Evidence  of  the  distribution  of  land  is  derived  from  about 


64  THE  CULTIVATION  OF  LAND. 

1257,  and  continuously  onwards.  It  cannot  be  by  accident  that  in 
the  numerous  accounts  of  private  estates,  none  are  found  before  this 
period,  and  that  they  are  abundant  after  it.  The  custom  of  keeping 
accounts  of  agriculture  and  of  manor  rolls  must  have  commenced 
about  the  period  of  strong  political  disaffection,  and,  I  may  add,  of 
generally  low  prices.  The  lord  ordinarily  owned  about  half  the 
estate  or  manor ;  but  it  is  from  his  bailiff's  accounts  only  that  I 
have  been  able  to  collect  any  evidence.  The  records  of  no  peasant's 
holding  have  survived,  even  if  any  account  was  taken  of  them.  But 
beyond  question  such  persons,  having  before  them  the  method  on 
which  the  lord  cultivated  his  estate,  profited  by  his  example,  by  his 
successes  and  failures.  In  many  ways  the  landowners  of  the 
thirteenth,  and  the  first  half  of  the  fourteenth  centuries  must  have 
been  the  instructors  of  the  poorer  cultivators,  just  as  in  a  more 
recent  and  stirring  time  the  best  English  landowners,  and  they 
were  then  many,  instructed  English  tenant  farmers  in  the  new 
agriculture. 

Nothing  can  be  more  carefully  and  more  exhaustively  drawn 
than  the  bainffs  account.  He  made  rough  notes  of  his  receipts  and 
expenditure,  and  from  these  notes,  which  Occasionally  survive,  the 
audit  was  based  and  the  roll  engrossed.  It  is  almost  always  in 
Latin,  and  the  writing  was  certainly  the  work  of  the  mendicant 
clergy.  But  it  is  absurd  to  imagine  that  the  bailiff  would  have 
rendered  his  account  in  an  unknown  tongue.  The  English  bailiff, 
generally  a  small  farmer,  often  a  serf,  must  have  been  at  least 
bi-hngual.  Everything  is  accounted  for,  all  receipts,  including* 
those  from  the  manor  court,  all  rents  and  all  produce.  The  acreage 
sown,  the  seed  required  for  the  purpose,  the  live  and  dead  stock  on 
the  farm  are  carefully  noted,  even  to  an  egg,  a  peck  of  tail  corn,  or 
a  chicken,  all  losses  are  given,  all  allowances  recorded,  and  the 
audit  completed,  and  the  quittance  admitted ;  and  then  the  bailiff 
began  in  the  samse  methodical  way  to  register  for  his  next  year's 
balance-sheet.  If  two  consecutive  years  of  these  accounts  are 
preserved,  one  can  easily  discover  what  the  rate  of  production  was 
from  the  previous  cultivation. 

Now  at  this  time  the  EngHsh  people  lived  on  the  produce  of  their 
own  country.  There  might  have  been  occasionally  imports  of  grain 
from  the  Baltic  seaboard,  and  there  are  occasions,  late  in  the  middle 


THE  ACCUEACY  OF  ANCIENT  ACCOUNTS.  55 

period,  in  which  notice  is  taken  of  such  trade,  from  which,  by  the, 
way,  came  that  peculiar  measure,  the  last  or  double  ton,  traceable 
as  a  local  measure  in  the  Eastern  counties  to  the  early  part  of  the 
eighteenth  century  at  least.  The  administration  was  alive  to  the 
expediency  of  prohibiting  the  export  of  corn  to  foreign  countries 
when  the  home  supplies  were  short.  Thus  in  1438-9,  the  only 
famine  of  the  fifteenth  century,  when  Parliament  petitioned  for  a 
relaxation  of  the  restraints  on  inland  water  carriage,  the  petition 
was  rejected,  on  the  plea  that  the  Government  were  convinced 
that  the  concession  would  be  interpreted  as  a  license  of  ex- 
portation. 

You  are  perhaps  acquainted  with  Gregory  King's  law  of  prices, 
one  of  the  most  important  generalizations  in  statistics,  and  applic- 
able to  all  values  whatever.  King  applies  it  to  the  harvest  only, 
and  states  that  a  defect  in  produce  raises  prices  in  a  different  ratio 
from  that  which  characterizes  the  dearth.    Thus,  a  defect  of — 

1  tenth  raises  the  prices  above  the  common  rate  3  tenths 

2  tenths               „                  „                  „  8  tenths 

3  tenths                „                  „                  „  1-6  tenths 

4  tenths                „                  „                  „  2-8  tenths 

5  tenths                „                 „                  „  4-5  tenths* 

This  rule  operates  in  depressing  as  well  as  in  exalting  prices,  and  is 
not  thought  of  in  times  of  high  and  low  prices  as  it  should  be.  It 
applies  to  all  articles  in  demand,  but  the  depression  is  more  marked 
Vd  the  case  of  over-supply  in  articles  of  voluntary  use,  and  the 
exaltation  more  marked  in  the  case  of  under-supply  in  articles  of 
necessary  use.  Hence  the  particular  phenomenon  which  King 
wished  to  comment  on,  the  effects  of  scarcity,  are  more  visible  in 
the  principal  grain  than  in  any  other.  Nor  must  it  be  inferred 
that  King  has  gathered  his  ratio  of  increase  from  an  actual  survey 
of  facts.  He  merely  means  to  imply  that  the  rise  will  be  in  some- 
thing like  this  proportion.  I  cannot,  indeed,  linger  on  this  subject, 
for  I  have  made  it  the  subject  of  a  special  lecture  to  be  given  here- 
after, but  I  may  mention  here  that  a  small  margin  of  excess  and 
defect  will  produce  results  which  are  entirely  disproportionate  to  the 
amount  of  excess  or  defect.  Of  course,  too,  when  the  population 
*  Davenant,  ii.  224. 


66  THE  CULTIVATION  OF  LAND. 

is  relatively  dense,  in  comparison  with  the  success  of  agriculture, 
scarcity  may  be  of  frequent  recurrence.  We  shall  find  that  it  was 
so  in  the  seventeenth  century,  and  between  1795  and  1819.  In  both 
these  periods  the  population  increased  rapidly,  by  virtue  of  well- 
ascertained  causes,  and  in  both  there  were  severe  and  continued 
famines. 

A  register  of  prices,  and  especially  of  prices  dated  through  the 
year,  the  highest  prices  being  generally  those  of  May,  when  the 
harvest  of  the  previous  autumn  was  getting  scanty,  and  the  prospects 
of  the  coming  harvest  were  uncertain,  is  nearly  equal  in  exactness  to 
a  meteorological  register,  and  is  even  more  suggestive.  Taking  the 
agricultural  year  from  Michaelmas  to  Michaelmas,  the  only  way  in 
which  agricultural  produce  can  be  annually  isolated  and  satisfactorily 
examined,  it  will  always  be  found  that  when  there  is  an  anticipation 
of  a  defective  harvest,  the  ordinary  high  prices  of  May  is  gradually 
enhanced,  and  if  the  anticipation  is  verified,  prices  go  on  increasing 
up  to  the  ensuing  May,  when  the  same  estimate  of  probabilities  is 
made,  with  analogous  results,  the  price  rising  if  they  are  unfavour- 
able, falling  if  they  are  satisfactory. 

The  severest  famine  ever  experienced  in  England  was  that  of  the 
two  consecutive  years  of  1315  and  1316.  In  both  these  years  the 
famine  was  occasioned  by  excessive  wet  and  defective  solar  heat,  the 
com  hardly  ripening  in  the  ear.  These  causes  have  always  produced 
dearth  in  England.  Our  ancestors  always  cut  their  corn  high  on  the 
stalk,  and  generally  used  the  sickle  for  all  kinds  of  grain.  They  had 
good  reason  for  the  practice.  By  cutting  high  they  could  reap  and 
carry  their  produce  in  nearly  all  weathers,  and  they  could  dry  it  with 
comparative  ease.  They  avoided  cutting  weeds  with  their  wheat, 
and  under  a  system  of  fallows  without  root  crops  their  land  inevit- 
ably became  foul,  and  they  could,  and  did,  cut  the  stubble  at  their 
leisure,  and  use  the  straw,  unbruised  by  threshing,  for  fodder  and 
thatching. 

In  1315,  the  price  at  harvest  time  is  high,  but  not  excessive.  It 
rapidly  rises  to  four  or  five  times  its  ordinary  value  by  May,  and 
hardly  drops  in  July  and  August.  In  the  next  yeai  it  is  scarcely 
ever  below  three  times  its  ordinary  price,  and  rises,  not  indeed  to  the 
extreme  famine  rates  of  the  previous  year,  but  to  even  four  times  its 
usual  price.  Nor  does  the  hope  of  the  ensuing  harvest  come  till  late. 


ENGLISH  FAMINES.  67 

The  weather  must  have  changed  for  the  better  in  the  month  of  July 
or  August,  and  happier  times  followed.  The  greatest  scarcity  of 
modem  times,  and  the  highest  recorded  price  of  wheat,  is  in 
December,  1800,  when  it  was  rather  more  than  double  that  which 
had  at  that  time  become  customary.  In  1315,  it  reached  more  than 
the  highest  estimate  of  increase,  which  is  suggested  in  Gregory 
King's  table  given  above.  Scarcities,  or  famines,  almost  as  serious 
occurred,  for  only  single  years,  in  1321,  1351,  and  1369.  There 
was  only  one  year  of  great  scarcity  during  the  fifteenth  century,  that 
of  1438,  already  referred  to.  In  the  sixteenth  the  dear  years  were 
1527,  1550  and  1551,  1554,  1555  and  1556,  when  the  base  money 
was  in  circulation,  and  worst  of  all  in  1595  and  1596,  when  the 
privation  was  nearly  as  severe  as  it  was  280  years  before.  Now  we 
may  be  quite  certain  that  the  same  cause  was  at  work  in  all  these 
cases,  excessive  rain  and  deficient  solar  heat  in  summer.  There  is 
a  curious  confirmation  of  these  inferences  in  the  price  of  salt.  A  bad 
harvest  is  always  a  dear  year  for  salt,  either  immediately  or  subse- 
quently. The  reason  is  that  all  the  salt  consumed  in  England,  and 
it  was  a  real  necessary  of  life,  as  for  half  the  year  people  lived  on 
salted  provisions,  was  obtained  by  solar  evaporation  only.  The  price 
of  salt  is  therefore  an  indirect  register  of  the  amount  of  solar  heat  in 
any  given  year. 

The  interpretation  of  the  facts  in  the  seventeenth  century  is  far 
from  easy.  In  no  period  of  previously  recorded  history  was  scarcity 
so  recurrent  and  so  prolonged.  But  though  public  affairs  were  of 
such  absorbing  interest,  very  little  note  is  taken  in  contemporary 
authors  of  the  terrible  straits  to  which  the  working  classes  were 
reduced.  I  should  weary  you  if  I  gave  you  a  list  of  all  the  famine 
years.  But  sometimes  they  continued  for  a  lengthened  period.  The 
five  years,  1646-1651  inclusive,  were  of  unbroken  dearth;  the 
middle  year,  1648,  being,  as  is  usually  the  case,  the  worst.  A  simi- 
larly calamitous  period  occurs  in  the  four  years  1658-1661,  the  last 
year  being  in  this  case  the  worst,  not  only  of  this  epoch,  but  of  the 
whole  century.  Lastly  come  the  seven  years  of  scarcity,  as  they 
were  called  at  the  end  of  the  century,  1692-98  inclusive. 

Now  during  the  seventeenth  century,  the  population  was  certainly 
doubled.  The  cause  of  this  was  partly  immigration  from  France, 
Flanders,  and  Germany,  of  refugees  from  the  wars  of  religion  and 


68  THE  CULTIVATION  OF  LAND. 

persecution,  partly  tbe  great  development  of  the  woolfen  industry, 
mostly  the  settlement  of  England  north  of  the  Trent,  which  began 
after  the  union  of  the  two  Crowns,  and  the  peace  of  the  Border.  By 
the  end  of  tbe  century,  as  we  know  from  the  hearth  tax,  the  north 
of  England  was  nearly  as  populous  as  the  south,  though  it  was 
far  poorer  and  more  backward.  Now  there  can  be  no  doubt  that 
owing  to  this  last  cause  the  area  of  cultivation  was  extended,  though 
it  is  certain  that  the  agriculture  was  rude.  The  invariable  comment 
of  writers  on  agriculture  in  the  seventeenth  century  proves  that  the 
farmer  was  grievously  rackrented  (low,  as  I  shall  show  in  a  later 
lecture,  as  the  rents  were,  according  to  our  modern  experience),  and 
was  therefore  at  once  impoverished  and  deterred  from  making  im- 
provements. It  is  true  that  the  labouring  peasant  suffered  even 
more  severely  than  the  farmer,  for  the  landowners  knew  well  enough 
that  if  they  could  compel  cheap  labour,  they  could  raise  their  rents, 
and  they  acted  steadily  on  that  conviction  in  their  assessments.  As 
I  have  already  stated,  the  justices  during  the  commonwealth  raised 
the  wages  in  their  assessments  quite  50  per  cent.,  and  though  their 
successors  after  the  Kestoration  tried  to  revert  to  the  old  rates, 
employers  paid  the  new.  It  is  satisfactory  to  discover  that  during 
the  great  part  of  the  period  between  the  Restoration  and  the  second 
Revolution,  the  price  of  wheat  was  low. 

In  the  first  half  of  the  eighteenth  century,  except  for  two  years, 
the  prices  of  all  the  necessaries  of  life  were  even  lower  than  they  had 
been  in  the  seventeenth,  but  this  was  due  to  the  praiseworthy  and 
patriotic  energies  of  the  great  landowners,  who  betook  themselves 
generally  to  the  new  agriculture,  and  encouraged  the  tenants  by 
their  own  example  to  follow.  A  vast  amount  of  land  was  enclosed, 
partly  what  had  been  open  fields,  partly  what  had  been  common, 
and  there  is  no  doubt  that  the  bounty  granted  on  exported  com  had 
its  effect.  In  point  of  fact  the  bomity  stimulated  the  least  objection- 
able kind  of  gaming,  gambling  for  the  bounty,  by  endeavouring  to 
increase  the  produce.  But  after  the  foolish  and  obstinate  war  with 
the  American  plantations,  and  still  more  during  the  prolonged  Con- 
tinental war,  comes  an  era  of  wild  finance,  of  enormous  debt,  of 
oppressive  indirect  taxation,  never  profitable  unless  it  attacks  the 
consumption  of  the  poor,  and  the  abandonment  of  landlord  culti- 
vation.     But  I  shall  have   occasion    to  deal  with    this    subject 


THE  CEABACTEB  OF  ENGLISH  AGBICULTUBE.        69 

more  exactly  when  hereafter  I  handle  the  history  of  agricultural 
rents. 

The  system  under  which  land  was  cultivated  was  one  of  very  re- 
mote antiquity,  was  possibly  prehistoric.  It  has  not  become  entirely 
extinct  till  very  recent  times,  for  I  have  myself  seen  it  still  in  opera- 
tion in  Warwickshire  and  elsewhere.  No  doubt  closes  and  meadows, 
usually  the  private  estate  or  demesne  of  the  lord,  were  in  existence 
in  very  early  times.  But  the  land  of  the  parish  or  manor,  these 
closes  or  meadows  excepted,  was  generally  distributed  as  follows. 
There  were  a  number  of  large  common  fields,  in  which  each  owner 
or  occupier  had  a  certain  number  of  furrows  more  or  less  frequently 
repeated.  Between  each  set  of  furrows  ran  an  imcultivated  balk,  a 
foot  or  so  in  breadth,  which  formed  a  boundary  or  landmark,  and  for 
some  time  of  the  year  a  pasture.  The  distribution  and  arrangement 
of  such  a  common  field  is  described  with  sufficient  accuracy  by  Fitz- 
herbert  in  his  treatise  on  surveying,  pubhshed  in  the  first  quarter  of 
the  sixteenth  century. 

But  you  will  understand  the  system  better,  after  you  have  inspected 
the  volume  which  I  have  by  me,  and  will  send  round  for  your  in- 
spection. This  is  an  exact  copy  of  a  survey  (the  original  is  still  in 
existence)  made  of  the  parish  of  Gamlingay  in  Cambridgeshire  in  1603, 
by  one  Thomas  Langdon,  and  for  which  Merton  College,  to  whom  the 
original  and  copy  belong,  paid  him  £12,  stating,  with  justice,  that  he 
had  most  beautifully  drawn  it.  It  certainly  is  not  only  the  most 
ancient  survey  which  I  have  seen,  but  by  far  the  most  exact  and 
elegant.  Gamlingay  is  a  large  parish  on  the  western  boundary  of 
Cambridgeshire.  It  contains  3,755  acres,  and  has  been  partly  in  the 
possession  of  Merton  College  by  gift  of  the  founder  firom  the  begin- 
ning of  that  college.  It  is  a  curious  coincidence,  that  the  earhest 
endowed  college  in  Oxford,  and  the  latest  endowed  college  in 
Cambridge,  Merton  here,  and  Downing  there,  are  interested  in 
Gamlingay. 

The  college  had  two  manors  in  the  parish,  one  which  goes  by  the 
name  of  Mertonage,  the  other  by  that  of  Avenells.  The  enclosures, 
meadows,  and  woods  belonging  to  the  college  by  its  possession  of 
these  two  manors  amount  to  a  little  over  816  acres.  There  was  a 
third  manor  in  the  parish,  that  of  Woodberry,  which  had  belonged 
to  the  Abbot  of  Saltreye.    The  college  is  the  principal  lord,  but 


60  THE  CULTIVATION  OF  LAND. 

there  are  otlier  consldercible  proprietors — as  the  Queen  ;  Captain 
Merton,  Clare  Hall,  in  Cambridge  ;  the  Vicar  of  Waresley,  in 
Hunts  ;  the  parish  of  Waresley  ;  and  a  Mr.  St.  George.  With  the 
family  of  this  last-named  proprietor  the  college  had  ancient  quarrels* 
for  they  went  to  law  with  a  William  St.  George,  of  Gamlingay,  in 
1344  and  1345,  and  spent  no  inconsiderable  sum  of  money  in  these 
years  with  the  view  or  plea  of  expediting  justice,  and  according  to 
modern  notions  in  a  very  suspicious  manner.  This  survey  was 
drawn  up  in  order  that  it  might  be  produced  in  court,  and  a  note  in 
the  original  is  to  the  effect  that  it  was  put  in  as  evidence  in  a  suit 
for  realty. 

•  You  will  notice  that  each  one  of  these  fields  is  divided  into  very 
numerous  strips,  and  that  the  dimension^  of  each  with  the  name  of 
the  owner  or  occupier  are  duly  given.  You  will  see  that  there  are 
some  thousands  of  these  strips.  Langdon's  survey  gives  thirty-four 
houses  in  the  village,  and  the  population  in  1601,  would,  therefore, 
be  from  a  hundred  and  fifty  to  a  hundred  and  seventy  persons.  At 
present  the  inhabitants  are  over  two  thousand,  and  the  increase  is 
in  accordance  with  what  I  have  suggested  was  the  population  of 
England  in  the  sixteenth  century. 

The  cultivation  of  the  common  fields  was  necessarily  that  of  two 
grain  crops  and  a  fallow.  Even  if  the  art  of  cultivating  roots  and 
artificial  grasses,  already  practised  in  Holland  had  been  known,  it 
could  not  have  been  practised  on  the  open  fields,  for  after  the  har- 
vest was  gathered,  all  the  sheep  and  cattle  of  the  parish  were  turned 
into  the  fields  to  feed  on  the  balks  and  what  they  could  pick  up 
among  the  stubbles.  In  this  case  the  owner  of  several  or  private 
pastures  had  a  great  advantage,  for  he  could  send  his  cattle  into  the 
common  field  with  those  of  the  other  occupiers,  and  ■rcocS^he 
aftermath  at  least,  or  rowens  as  it  is  sometimes  called,  of  his  own 
meadows,  till  the  common  field  was  eaten  bare.  No  doubt  a  great 
deal  of  injustice  was  done  by  the  enclosures  of  the  eighteenth 
century,  but  the  new  agriculture  would  have  been  impossible  without 
them,  and  the  new  system  was  the  making  of  English  agriculture, 
and,  when  Sir  J.  Sinclair  carried  it  further  north,  of  the  Scottish. 

The  owners  or  occupiers  of  these  common  fields  had  other  advan- 
tages in  the  commons  of  pasture  and  the  lord's  woods.  These 
commons  of  pasture  seem  to  have  been,  in  early  times,  almost  uni- 


COMMON  FIELDS.  Gl 

versal.  They  were,  it  would  appear,  that  part  of  the  settlement 
which  was  least  convenient  for  the  plough,  least  accessible,  and  least 
defensible.  A  modem  English  village,  with  its  street  and  its  church, 
and  its  very  few  outlying  houses,  is  a  distinct  survival  of  the 
earliest  occupation.  In  my  native  place  in  the  Meonwaras  I  have  no 
manner  of  doubt  that  many  of  the  village  houses  have  been  sites  for 
habitation  during  a  dozen  centuries,  and  that  homesteads  in  the 
parish  but  away  from  the  street  are  comparatively  modem  occupan- 
cies. Now  in  this  common  of  pasture,  there  was  generally  no 
stint.  When  the  stint  of  pasture  was  the  rule,  it  was  either  because 
the  common  was  of  limited  extent,  or  was  merely  the  same  thing 
as  saying  that  the  tenant  of  a  small  holding  could  not  have,  and 
therefore  should  not  have,  an  excess  of  beasts  or  sheep  on  the 
common  pasture.  The  case  of  the  lord's  woods,  and  the  pannage 
of  pigs  was  a  different  affair.  This  was  pnly  a  qualified  right  on  the 
part  of  the  tenants.  They  had  no  rigbt  to  send  their  hogs  under 
the  common  swineherd,  except  underj  payment,  but  I  am  sure 
that  every  tenant  who  paid  pannage,  generally  a  half-penny  an 
animal,  had  the  right  to  send  them  into  the  wood,  to  browse  on  the 
acorns  or  beech  mast.  This  at  least  I  have  gathered  from  the  manor 
accounts,  where  the  fines  on  defaulters  are  recorded,  but  no  charge 
of  trespass  made. 

I  have  already  referred  to  the  enormous,  the  prohibitive  price  of 
iron.  The  plough  was  rude,  though  if  one  can  trust  the  earliest 
writers  on  husbandry,  an  acre  a  day  was  a  moderate  amount  for  a 
first  ploughing.  But  the  ground,  I  suspect,  was  only  scratched.  Deep 
ploughing  was  a  thing  of  the  remote  future.  The  peasant  farmer, 
even  in  the  sixteenth  century,  could  not  afford  an  iron  harrow.  The 
teeth  of  this  implement  when  he  used  it,  especially  when  the  ground 
was  stony,  were  oaken  pins  carefully  dried  and  hardened  at  the  fire. 
The  cart  was  generally  supplied  with  solid  wheels,  bored  out  of  a 
tree  trunk,  for  iron  was  too  dear  for  tires,  even  after  the  cost  had 
been  considerably  reduced,  for  I  have  found  such  wheels  well  into 
the  sixteenth  century,  when  iron  was  half  the  price  at  which  it  was 
purchased  in  the  fourteenth. 

The  cattle  on  these  farms  were  small  and  stunted  by  the  priva- 
tions of  the  winter.  There  was  no  attempt  to  improve  breeds.  Cows 
are  a  good  deal  cheaper  than  oxen,  bulls  a  good  deal  cheaper  than 


62  THE  CULTIVATION  OF  LAND. 

cows.  Nor  does  there  seem  to  have  been  any  attempt  of  a  general 
kind  to  improve  the  breeds  of  sheep.  I  have  fomid  some  dear  rams, 
but  they  are  quite  exceptional.  There  was  to  be  sure  temptation 
enough.  Certain  wools  from  the  neighbourhood  of  Leominster  were 
eight  times  dearer  than  wool  from  Suffolk.  Even  as  late  as  the  play 
of  Friar  Bacon  and  Friar  Bungay,  Leommster  wool  is  quoted  ag 
superlative.  In  1734  Lord  Lovell  only  gets  8d.  a  pound,  or  7s.  a  tod, 
for  Norfolk  wool.  It  is  true  that  at  this  time,  the  old  monopoly  of 
English  wool  had  passed  away.  But  in  the  fourteenth  century  wool 
was  often  three  times  the  nominal  price  of  Lord  Lovell's  sales.  The 
fact  is  there  was  no  winter  feed,  and  unless  the  farmer  can  keep  his 
live  stock  continually  in  condition,  it  is  idle  to  talk  of  breeds,  or  to 
make  any  attempt  to  perpetuate  or  select  them.  I  do  not  believe 
that,  on  the  average,  any  material  increase  was  made  in  the  market- 
able ox,  between  the  fourteenth  and  the  eighteenth  centuries,  and 
but  little  in  the  size  of  the  marketable  sheep.  * 

In  the  agricultural  economy  of  the  Middle  Ages,  the  regular  clergy 
were  of  no  little  importance  and  value.  The  Benedictines,  apart 
from  their  learning,  were  the  great  agents  in  making  such  improve- 
ments in  husbandry  as  the  age  could  effect,  the  Cistercians  in  sheep- 
breeding  and  wool  deahng.  It  is  quite  possible  that  in  early  times, 
the  fatal  gift  of  wealth  had  demoralized  the  earlier  orders,  as  ap- 
parently the  habit  of  simulated  poverty  did  the  Franciscans  and 
Dominicans.  But  the  social  civilization  of  England  would  have 
been  greatly  retarded  had  it  not  been  for  the  efforts  and  the  labours 
of  the  regular  clergy.  Thousands  of  acres  were  reclaimed  by  the 
industrious  monks,  and  estates  of  great  value,  acquired  in  later  times 
by  the  favourites  and  accomplices  of  Henry  VIII.  were  turned  from 
desert  into  garden  by  the  ancient  orders.  They  continued  up  to 
the  Dissolution  to  be  indulgent  landlords,  partly,  perhaps,  because 
they  had  become  unpopular,  and  retained  the  stock  and  land  lease, 
out  of  which  the  tenant  had  become  enriched  and  independent,  after 
the  landowner  was  constrained  or  induced  to  abandon  it.  They 
were  the  principal  agents  in  keeping  the  roads  in  repair,  for  as  their 
estates  were  scattered,  and  their  rents  were  taken  in  kind,  or  valued 
in  money  and  taken  in  kind,  it  was  an  object  with  them  to  make 
access  to  the  moiiastery  easy  and  safe.  It  is  certain  that  after  the 
Dissolution  roads  got  out  of  repair,  though  I  do  not  think  that  even 


THE  BEGULAB  CLEBGY  AND  AGBICULTUBE.  63 

the  king's  highway  was  in  so  scandalous  a  condition  in  the  reign  of 
Elizabeth,  as  it  was  two  centuries  afterwards  in  the  reign  of  George 
III. 

You  will  of  course  understand  that  in  the  age  which  I  have 
attempted  to  describe,  and  in  describing  which  I  have  accumulated 
and  condensed  a  vast  mass  of  unquestionable  facts,  the  rate  of  pro- 
duction was  small,  the  conditions  of  health  unsatisfactory,  and  the 
duration  of  Hfe  short.  But,  on  the  whole,  there  were  none  of  those 
extremes  of  poverty  and  wealth  which  have  excited  the  astonish- 
ment of  philanthropists,  and  are  now  exciting  the  indignation  oi 
workmen.  The  age,  it  is  true,  had  its  discontents,  and  these  dis- 
contents were  expressed  forcibly  and  in  a  startling  manner.  But  O) 
poverty  which  perishes  unheeded,  of  a  willingness  to  do  honest  worL 
and  a  lack  of  opportunity,  there  was  Httle  or  none.  The  essence  of 
life  in  England  during  the  days  of  the  Plantagenets  and  Tudors  was 
that  every  one  knew  his  neighbour,  and  that  every  one  was  his 
brother's  keeper.  My  studies  lead  me  to  conclude,  that  though  there 
was  hardship  in  this  life,  the  hardship  was  a  common  lot,  and  that 
there  was  hope,  more  hope  than  superficial  historians  have  conceived 
possible,  and  perhaps  more  variety  than  there  is  in  the  peasant's 
lot  in  our  time. 

Perhaps  it  may  be  well  to  say  a  Httle  on  the  effect  which  the 
English  system  of  agriculture  induced  on  the  social  system  of  the 
country,  and  especially  on  the  landowners.  I  have  already  stated, 
that  where  everybody  was  an  husbanihnan,  everybody  was  interested 
in  keeping  the  peace,  and  making  everybody  else  keep  it.  It  is  true 
that  the  law  of  primogeniture  had  been  long  a  settled  principle  in 
the  jurisprudence  of  the  common  law.  But  in  the  fourteenth  cen- 
tury the  stock  on  a  well-tilled  farm,  and  every  landowner  tilled  his 
land,  and  on  the  whole  tilled  it  according  to  the  best  knowledge  of 
the  time,  the  stock  of  a  farm  was  worth  at  least  three  times  that  of 
the  fee  simple,  as,  unless  some  wisdom  supervenes,  it  seems  likely 
soon  to'  be  in  our  days,  for  land  was  constantly  sold  at  six,  eight, 
and  twelve  years'  purchase,  with  sixpence  an  acre  rent.  But  though 
the  land  went  to  the  eldest  son,  the  personal  estate  went  to  all  the 
children  equally,  or  was  made  the  subject  of  a  wUl.  William  the 
Norman  had,  for  administrative  purposes,  enforced  the  concentra- 
tion of  land  on  the  representative  of  a  family  against  the  half- 


64  THE  CULTIVATION  OF  LAND, 

conquered  and  discontented  English  ;  for  equally  politic  reasons,  he 
had  striven  to  scatter  the  estates  of  the  nobles,  so  as  to  make  him 
powerful  against  them,  but  he  had  not  attempted  to  induce  the  law 
of  entail  on  personal  property.  He  was  too  shrewd  to  do  so,  and 
his  successors  shared  his  intelHgence. 

For  some  centuries,  then,  the  younger  son  of  a  great  estate  was 
unlmown.  He  shared  in  the  stock,  and  I  have  Httle  doubt  that  the 
motive  of  the  famous  statute  which  did  away  with  subinfeudation 
was  to  facilitate  the  independen-t  acquisitions  of  the  younger  son,  to 
enable  him  to  purchase  without  dependency  on  his  elder  brother. 
The  king  had  no  objection,  for  it  multiplied  his  chances  of  escheat. 
The  entail,  though  chronologically  earlier,  was  economically  later, 
for  it  is  clear  to  me,  from  the  documents  which  I  have  examined, 
that  entails  were  not  general,  at  least  on  large  estates,  till  the  civil 
wars  of  the  fifteenth  century,  and  not  common  even  then. 

After  the  great  plague,  and  still  more  notably  after  the  French 
war  had  endured  for  a  generation  or  two,  the  younger  son  becomes 
a  social  inconvenience.  The  landowners,  now  landlords  who  let 
their  land  at  a  rent,  were  the  sole  inheritors.  The  younger  sons 
sought  their  fortunes  in  the  church  and  in  the  army.  The  cadets 
of  noble  families  appear  among  the  bishops,  and  men,  sometimes 
not  of  noble  birth,  rose  to  knighthood  and  nobility  through  the 
army,  for  not  a  few  of  our  oldest  titles  were  won  by  military  adven- 
turers. Some  of  these  warriors  became  large  purchasers,  as 
Fastolfe  in  the  fifteenth  century.  Some,  like  Cromwell,  Henry 
VI.'s  treasurer,  rose  to  rank  by  the  Administration.  But  these  were 
lucky  people,  the  select  of  the  fittest,  or  unfittest,  as  the  case  might 
be.  The  less  fortunate  became,  as  an  only  resource,  military  par- 
tisans, and  were  the  stimulators  and  victims  of  the  so-called  war  of 
succession  in  the  fifteenth  century.  It  was  really  a  faction  fight,  in 
which  the  Yorkist  party  strove  to  reform  the  Government,  and  the 
Lancastrian  to  appropriate  the  spoils. 

When  the  great  plague,  and  the  consequent  deamess  of  labour 
made  landlord  cultivation  impossible,  the  landowners  established 
the  stock  and  land  lease.  It  was  probably  borrowed  from  monastic 
usage.  The  monasteries  were  wealthy,  and  were  obliged  to  be  ready 
to  hold  themselves  at  ranst)m.  The  inmates  were  under  vows  of 
poverty,  the  abbot  was^  if  I  can  judge  from  his  table  and  his  per- 


THE  STOCK  AND  LAND  LEASE.  66 

sonal  expenditure,  of  which  I  have  seen  much,  under  no  such 
restraint.  But  he  husbanded  the  goods  of  the  monastery,  and 
among  them  its  savings.  Some  who  had  been  reckless  in  their 
expenditure  were  degraded  or  displaced,  occasionally  bringing  ruin 
on  the  establishment  whose  affairs  they  administered.  To  abbots 
who  wished  to  invest  the  property  of  the  monastery  safely  and 
profitably,  especially  at  a  crisis  Hke  that  of  1349,  the  stock  and  land 
lease  offered  great  attractions. 

In  the  stock  and  land  lease,  the  owner  of  the  soil,  who  had  pre- 
viously been  its  cultivator,  let  a  farm,  furnished  with  seed  com, 
and  stock,  Hve  and  dead,  to  a  tenant  for  a  term,  the  condition 
being  that  the  tenant  should,  at  the  end  of  the  term,  deliver  the 
stock  scheduled  to  him,  in  good  condition,  or  pay  the  money  at 
which  they  were  valued  when  the  lease  commenced.  The  valua- 
tion is  generally  low,  and  when  I  first  came  across  this  kind  of  lease 
I  thought  that  the  landowner  let  his  tenant  only  the  inferior  articles 
on  his  own  farm.  But  on  inspecting  the  items,  I  came  to  the  con- 
clusion that  the  low  valuation  was  employed  partly  to  attract 
tenants, partly  to  cover  a  very  serious  risk,  which  I  subsequently  found 
that  landlords  regularly  incurred,  that  of  compensating  their  tenants 
for  losses  by  disease  among  their  cattle  and  sheep,  certainly  the 
latter,  when  the  loss  was  above  a  particular  percentage,  all  below 
falling  on  the  tenant.  The  value  of  the  live  stock  is,  of  course,  the 
principal  item  in  the  valuation,  which  is  always  written  out  annually 
on  the  bailiff's  roll.  I  have  found,  too,  that  under  this  system,  the 
landlord,  if  no  exceptional  loss  occurred,  did  nearly  as  well  as  on  the 
old  system  of  landlord  cultivation. 

The  stock  and  land  lease  generally  prevailed  for  about  seventy 
years  after  the  owner  had  put  it  into  operation  on  his  own  estate. 
Thus  Merton  College  let  most  of  its  land  on  this  prinTiiple,  shortly 
after  the  Great  Plague,  and  continued  it  to  about  the  end  of  the  first 
quarter  in  the  fifteenth  century.  New  College  carried  on  farming 
on  its  own  account,  at  least  on  some  of  its  estates,  up  to  the 
end  of  the  first  quarter  of  the  fifteenth  century,  and  continued 
the  lease  till  the  end  of  the  century.  But  the  monasteries 
had  it  in  operation  up  to  the  time  of  the  Dissolution,  and  a 
considerable  part  of  the  assets  of  these  institutions  in  the  tima  of 
Edward  VI.  consisted  of  stock  let  to  tenants  for  various  terms. 


66  THE  CULTIVATION  OF  LAND. 

Now  I  am  disposed  to  believe  that  the  landowners  would  not  have 
abandoned  the  system,  from  which  they  got  so  good  an  income, 
voluntarily,  and  that  this  kind  of  lease  was  dropped  by  the  tenant, 
who  accumulated,  during  the  prosperity  of  the  fifteenth  century, 
the  means  for  buying  stock  for  themselves,  and  even  land.  On  the 
other  hand,  the  monasteries  would  have  offered  easier  teims  as  time 
went  on.  It  is,  of  course,  also  possible  that  the  armed  factions  of 
the  fifteenth  century  were  in  want  of  money,  and  therefore  made 
advantageous  sales  of  stock  to  their  tenants  ;  or  that  their  tenants, 
taking  advantage  of  the  purchase  clauses  in  the  lease,  elected  to 
forfeit  the  prices,  rather  than  restore  the  stock. 

The  system  of  landlord  cultivation,  though  it  became  rare,  did 
not  entirely  disappear.  The  monasteries  generally  had  one  or  two 
farms  in  their  own  hands,  near  to  them,  from  which  they  drew  sup- 
phes.  In  these  cases,  it  was  the  invariable  practice  of  the  bailiff  to 
debit  them,  and  take  credit  to  himself  for  the  sales  which  he  effected 
with  his  own  employers.  Thus  Battle  Abbey  held  two  estates  in 
their  own  hands,  one  at  Appledrum,  the  other  at  Lullington  in 
Sussex,  produce  from  which  was  regularly  sent  to  the  monastery. 
The  great  convent  of  Sion,  too,  retained  Isleworth  in  their  hands  for 
similar  purposes.  It  is  pretty  clear  that,  till  they  were  squeezed 
out  of  it  by  the  first  Lord  Bedford,  the  abbot  and  monks  of  West- 
minster held  their  e.-tate  of  Convent  Garden,  north  of  the  Strand, 
and  now  the  London  property  ol  the  Eussells,  for  the  same  pur- 
pose. Again,  Fastolfe,  the  well-known  military  adventurer  of  the 
war  in  France,  of  the  fifteenth  century,  cultivated  an  extensive 
barley  estate  in  Norfolk,  and  traded  largely  in  malt  with  the  Low 
Countries.  Waynflete,  the  Bishop  of  Winchester  and  founder  of 
Magdalene  College,  was  made  Fastolfe's  executor,  and  contrived  to 
divert  a  portion  of  the  estate  which  the  deviser  intended  for  otber 
charitable  purposes  to  the  college  which  he  was  founding.  I  sus- 
pect that  the  transaction  was  very  suspicious,  for  this  pious  founder 
was  truly  described  by  his  contemporaries  as  nefarius  iste  episcopus. 
But  for  all  this,  he  has  had  the  best  of  it  with  posterity. 

The  next  stage  is  the  lease  for  terms  of  years.  But  the  peculiar 
character  of  this  lease,  especially  in  the  fifteenth  century,  is,  I  think, 
a  proof  that  the  position  of  the  tenants  is  improving,  and  that  the 
accumulation  of  occupancies  in  their  hands  was  gradual.    Most  of 


DEVELOPMENT  OF  LAND  TENANCIES.  67 

the  tenancies  are  of  numerous  parcels,  the  lease  of  each  parcel 
being  determinable  at  different  years.  Sometimes  a  tenant  will 
have  a  dozen  of  them,  spread  over  as  many  years.  This  kind  of 
tenancy  must  have  made  distraint  for  rent  very  difficult,  when  there 
was  nothing  but  cattle  to  distrain  on.  I  cannot  but  think  that  the 
other  forms  of  action  by  which  rent  was  recoverable  were  expe- 
dients adopted  in  order  to  obviate  the  difficulty  of  distraining  on 
land  which  was  held  under  many  grants. 

Tenancies  for  life  were,  no  doubt,  not  infrequent.  When,  about 
the  middle  of  the  fifteenth  century,  Franks,  the  Master  of  the  Eolls, 
devised  a  thousand  pounds  to  Oriel  College,  the  existing  body  of 
fellows,  with  commendable  self-denial,  piu-chased  the  reversion  of  an 
estate  in  Berkshire,  held  by  a  man  and  his  wife,  for  the  term  of 
their  natural  lives.  The  man  died  soon  after  the  purchase ;  the 
widow  was  disagreeably  vivacious.  The  college  made  all  sorts  of 
offers  to  her,  temporal  and  spiritual ;  for  the  fellows  of  Oriel,  before 
the  Keformation,  had  a  very  active  and  successful  trade  in  religious 
offices.  But  the  widow  was  inexorable,  and  the  college  had  to  wait 
for  her  demise.  If  I  remember  rightly,  she  lived  till  near  the  eud 
of  the  century,  probably  outlived  all  the  purchasers. 

The  last  was  the  tenancy  at  will,  or  at  rack-rent.  Up  to  the 
beginning  of  the  seventeenth  century  there  was  little  chance  of  such 
a  rent,  and  the  casual  or  irregular  gains  of  the  overlord  were  chiefly 
derived  from  practising  sharp  manor  custom  on  his  copyholders  and 
freeholders,  as  Fitzherbert  broadly  intimates,  a  form  of  oppression 
which  Norden's  treatise  on  surveying,  pubHshed  early  in  the  seven 
teenth  century,  reluctantly  allowed  to  have  been  charged  frequently 
against  his  principals.  But  it  is  duriug  the  seventeenth  century 
that  rack-renting  and  rent-raising  became  so  general  as  to  arouse 
indignant  remonstrance  at  the  hands  of  nearly  every  person  who 
writes  on  seventeenth -century  agriculture,  the  special  complaint 
being  that  it  discourages  all  progress.  But  into  the  particulars  of 
this  stage  I  shall  enter  when  I  treat,  in  a  subsequent  lecture,  of  the 
economical  history  of  rent. 

To  this  occasion,  also,  I  must  defer  what  I  should,  had  time  per- 
mitted, have  commented  on  in  this  lecture — the  remarkable  de- 
velopment of  English  agriculture  during  the  eighteenth  century. 
It  is  almost  worthy  of  separate  treatment.     But  in  these  outlines  I 


68  TEE  CULTIVATION  OF  LAND. 

am  seeking  to  give  those  leading  features  of  economical  history 
which  have  been  so  conspicuous  in  our  own  country.  The  par- 
ticulars, though  of  profound  economical  significance,  rather  belong 
to  that  history  of  English  agriculture  which  I  have  been  the  first 
to  discuss  and  expound. 


IV. 

THE  SOCIAL  EFFECT  OF  EELIGIOUS  MOVEMENTS. 

Europe  after  the  fall  of  the  Western  Empire— The  Church  and  *'^ 
monasteries  the  only  hope  of  fivilization,  especially  the  ^^we- 
dictines — The  three  parties  in  the  English  Churchy  official,  pJional, 
and  papal — The  situation  in  Wiklif's  days— His  Summa  "^li^ohgice, 
and  its  purpose — The  poor  priests  and  the  peasanpi^—The  con- 
ditions of  religious  movements  —  The  teaching  6  PecoTc  —  The 
sects  of  the  Reformation — The  Independents  ar^  i^^  Revolution 
of  1688 — T7ie  movement  of  the  Wesleys — The  ^Mcient  prosperity  of 
Norfolk. 

You  will  of  course  anticipate  that  in  dealing  with  the  subject  before 
me  to-day,  "  The  Social  Effect  of  Religious  Movements  in  English 
History,"  I  do  not  pretend  to  discuss  the  religious  tenets  which  have 
from  time  to  time  been  inculcated  by  those  who  have  been  prominent 
actors  in  these  stirring  events.  There  may,  indeed,  be  a  few  particu- 
lars which  I  must  deal  with,  in  order  to  elucidate  my  estimate  of  the 
results  which  have  from  time  to  time  been  brought  about  in  thfe 
social  and  economical  history  of  England,  by  religious  impulses. 
I  am  indeed  disposed  to  believe,  that  however  much  a  later  habit  of 
mind  has  repudiated  what  was  once  thought  necessary  and  true,  the 
promulgation  and  acceptance  of  such  tenets,  the  defence  of  them, 
and  even  as  we  may  now  think  the  enormous  crimes  perpetuated  in 
order  to  enforce  them,  were  acts  of  good  faith,  and  were  honestly 
believed  essential  to  the  safety  of  society.  The  historian  who  com- 
ments on  the  violence  of  Hildebrand,  on  the  cruelties  of  Dominic, 
on  the  arrogance  of  Innocent,  on  the  migration  to  Avignon,  on  the 
epoch  of  the  Councils,   on  the   causes   of  the   German  and  the 


70     THE  SOCIAL  EFFECT  OF  BELIGIOUS  MOVEMENTS. 

Genevan  Eefonnation,  on  the  rise  of  Loyola,  on  tlae  religious  wars 
which  endured  from  1550  to  near  a  century  later,  on  the  last  great 
outrage  on  our  modem  notions,  the  expulsion  of  the  Huguenots, 
and  the  Penal  Code  of  Ireland,  may  justly  point  out  that  infinite 
mischief  has  arisen  from  the  pohcy  which  these  circumstances 
indicate,  but  he  errs  as  mischievously,  if  he  thinks  that  the  designs 
of  those  who  promoted  them  were  consciously  dishonest. 

I  have  always  regretted  that  in  this  place  the  authorized  in- 
structor in  ecclesiastical  history  rarely  travels  beyond  the  first  four 
centuries  of  our  era,  and  as  far  as  I  can  learn,  rarely  gives  a  satis- 
factory exposition  of  what  occurred  in  that  time.  For  up  at  least 
the  fifteenth  century,  the  development  of  theological  dogma  and 
^^Nipline  is  a  continuous  process,  every  stage  of  which  bears  upon 
the \atory  of  the  age;  the  reaction  from  which,  begun  in  this 
countiyyond  carried  thence  to  Eastern  Europe,  culminated,  at  last 
in  the  sc^pis  of  Luther  and  Calvin.  I  cannot  see,  in  short^how 
men  can  mictfe^^stand  the  Reformation,  unless  they  understand  what 
it  resisted,  whatst  attempted  to  reform,  what  were  the  compromises 
to  which  it  was  Unstrained  to  submit,  and  why  it  was  so  con- 
strained. The  attacKg^nd  defence  of  the  old  creed  and  practice  in- 
volve the  profoundest  jsolitical,  moral,  and  social  effects,  and  the 
interpretation  of  these  effects,  is  obscured  rather  than  assisted  by 
limiting  one's  inquiry  to  the  faith,  the  discipline,  and  the  practice  of 
the  Early  Church. 

The  administration  of  the  Eoman  Empire  made  total  havoc  of 
ancient  civilization.  The  ruin  would  have  been  earlier  but  for  the 
Empire,  but  it  was  inevitable  that  the  Empire  should  bring  the 
ruin.  In  thie  universal  chaos  two  powers  survived — the  Church  and  a 
few  municipalities.  But  the  latter  were  weak,  and  almost  exhausted ; 
the  fonner  had, to_be  concentrated,  and  to  claim  large  authority,  in 
order  that  it  might  continue  to  exist  as  a  social  force.  The  ceno- 
bite  and  industrial  Hfe  which  the  Church  assumed  were  necessary 
towards  the  revival  of  civilization.  The  Teutonic  irruption  adopted 
the  vices  of  the  later  Empire  without  inheriting  its  discipline  and 
subordination.  It  was  essentially  lawless  in  the  fact  that  it  did 
not  acquiesce  in  any  central  and  legal  authority.  It  rapidly  de- 
generated even  from  ancestral  custom.  The  picture  of  the  early 
Frankish  monarchies,  given  by  Gregory  of  Tours,  and  less  clearly  by 


EUBOl'E  AFTER  THE  FALL  OF  THE  WES  TEEN  EMPIRE.  71 

Fredegarius,  is  sufiBcient  to  show  how  early  and  how  complete  the 
anarchy  was. 

There  was  for  many  a  century  only  one  Power  which  could  make 
head  against  this  recurrent  chaos,  for  the  empire  of  Charles  the 
Great,  carefully  organized  as  it  was,  had  as  brief  a  duration,  and 
became  as  utterly  chaotic  as  the  Frankish  monarchy  which  it  super- 
seded. This  was  an  orderly  community,  having  a  universal  rule 
and  a  guiding  centre,  which  was  loyal  to  the  source  of  its  own 
authority,  and  yet  could  be  kept  wholesome,  even  if  the  source 
became  depraved.  Such  was  the  great  Benedictine  order,  which 
preserved  the  rehcs  of  ancient  Hterature  and  ancient  law,  restored 
agriculture,  was  an  asylum  against  lawlessness,  monarchical  or 
aristocratic,  and  was  able  to  survive  the  scandalous  profligacy  which 
characterized  the  Papacy  in  the  tenth  century,  and  even  to  be  a 
great  agent  in  the  reformation  of  it,  under  Hildebrand.  The 
philosophy  of  history  proves  that  the  monastic  orders  were  the 
centre  and  the  life  of  a  reviving  civilization.  Though  I  confess  that 
I  cannot  see  in  the  "Monks  of  the  West"  all  that  Montalembert 
saw,  I  can  discern  that  we  owe  to  their  example  that  habits  of  law 
the  dignity  of  labour,  the  promotion  of  education,  and  the  record  of 
history,  were  not  lost  during  the  six  centuries  of  their  early  career. 
Nor  do  I  wonder  that,  from  the  point  of  view  of  the  pubHc  interest, 
apart  from  the  strength  which  it  gave  the  central  power,  all 
ecclesiastical  authority  favoured  the  cenobite  at  the  expense  of 
the  regular  clergy.  Had  the  influence  of  Odo  and  Dunstan  been 
enduring,  Saxon  England  would  have  probably  held  its  own  agauist 
foreign  invaders. 

The  policy  of  William  the  Norman  was  to  establish  an  indepen- 
dent Church,  ruled  by  his  nominees.  But  he  was  resolute  and 
successful  in  checking  foreign  ecclesiastical  aggression,  however 
defensible  it  might  be  in  theory  in  the  hands  of  a  reformer  such  as 
Gregory  VII.  was.  William  was  a  very  diSerent  person  from  Henry 
IV.  of  Germany,  and  never  needed  to  go  an  inch  on  the  road  to 
Canosa.  It  is  singular,  but  an  illustration  of  what  I  have  been 
saying,  that  during  the  nineteen  years  in  which  William's  grandson 
was  king,  though  lawlessness  was  everywhere,  more  monasteries 
were  founded  than  in  any  other  reign.  But  evil  as  were  the 
times  of   Stephen,  they  developed  a  set  of  circmnstances  which 


72     THE  SOCIAL  EFFECT  OF  BELIGIOUS  MOVEMENTS. 

were  rapidly  made  manifest  during  the  more  vigorous  reign  of 
his  successor. 

From  the  time  of  Henry  II.  and  onwards  to  the  Eeformation  in 
England,  three  sections,  or,  as  the  ancients  would  have  called  them, 
schools,  are  always  visible  in  the  English  Church.  The  first  is  the 
official  section,  which  I  may  call  by  a  prolepsis  the  Erastian  party, 
which  maintained  the  authority  of  the  executive,  and  could  always  be 
depended  on  by  the  king.  These  men  were  generally  the  principal 
officials  of  the  exchequer,  the  ancient  description  of  which,  first 
printed  by  Madox,  purports  to  be  written  at  the  dictation  of  one  of 
them.  T^  this  party  belonged  most  of  the  bishops  in  Becket's 
time,  andi  the  clerical  chancellors  and  treasurers  of  succeeding 
centuries.  \ 

The  second  is  what  I  may  call  the  national  section  or  Anglican. 
To  this  bebnged  such  men  as  Becket,  Langton,  and  Grostete. 
They  were  ^specially  characteristic  of  the  sixteenth  century,  in  the 
person  of  suph  men  as  Gardiner,  who,  if  the  tenets  of  the  old  faith 
were  left  unimpaired,  were  perfectly  willing  to  sanction  and  assist 
Henry  in  freeing  himself  from  the  authority  of  the  Papacy.  It  is 
a  striking  fact^  and  one  rarely  referred  to,  even  by  ecclesiastical 
historians,  that\Gardiner  and  Bonner  resisted  and  protested  against 
the  rescissory  Act  of  Mary  Tudor's  reign,  under  which  all  Acts  of 
Parliament  denying  the  authority  of  the  Roman  See  were  abrogated 
in  a  lump  at  the  instance  of  Cardinal  Pole. 

The  third  was  the  Papal  or  Ultramontane  party.  As  a  rule, 
this  party  was  chiefly  found  in  the  monasteries,  and  at  last  ex- 
clusively. The  origin  of  the  regular  orders  was  Papal,  or  if  this 
were  doubtful,  the  privileges  and  exemptions  which  the  monasteries 
enjoyed  were  of  Papal  origin  and  Papal  grant.  There  was  nothing 
which  the  monks  desired  more  than  exemption  from  episcopal 
discipline,  and  there  was  nothing  which  the  bishops  resented  and 
resisted  more  than  these  exemptions.  There  is  an  amusing  illus- 
tration of  conflicting  opinion  in  Matthew  Paris.  He  is,  unlike  most 
monks,  strongly  Anglican  in  his  sentiments,  and  criticises  un- 
sparingly the  king  for  his  impolitic  actinn,  and  the  Pope  for  playing 
on  Henry's  weakness.  In  so  far,  therefore,  as  Grostete  resisted  the 
Papal  nominations,  he  is  a  credit,  in  the  eyes  of  Paris,  to  the  English 
Church   and  the   episcopate;    in   so   far   as   he   strove  to   extend 


THE  THREE  PARTIES  IN  THE  ENGLISH  CHTJRCH.    73 

episcopal  discipline  over  the  monasteries  in  his  diocese,  he  was  an 
enemy  to  the  Church,  and  to  be  condemned. 

Sometimes,  as  in  the  fifteenth  century,  the  Anglican  party  was 
almost  absorbed  in  the  official,  when  hardly  a  bishop  was  found  in 
his  diocese,  but  most  often  were  in  attendance  on  the  Court.  Some- 
times the  secular  clergy  made  common  cause  with  the  regular,  as 
when  they  all  concurred  in  getting  from  Boniface  the  Eighth,  the 
famous  Bull,  Clericis  laicos,  and  thereafter  were  entirely  reduced  to 
submission  by  the  king.  But  I  am  disposed  to  believe  that  the 
secular  clergy  would  have  made  little  stir,  had  the  movement  of  the 
fourteenth  century  anticipated,  as  it  was  close  upon  doing,  the 
Dissolution  of  the  sixteenth.  The  older  orders  had  become  wealthy 
and  neghgent,  and  though  the  two  orders  of  begging  friars  were  at 
the  heighth  of  their  reputation  in  the  thirteenth  century,  it  is  plain 
that  they  became  unpopular  in  the  fourteenth,  not  perhaps  by  the 
direct  possession  of  wealth,  from  which  the  rules  of  their  order  ex- 
cluded them,  but  by  the  trusts  which  were  created  on  their  behalf, 
on  the  enjoyment  of  which  they  entered,  as  freely  and  fully  as 
those  of  the  other  and  older  orders  did  on  their  endowments.  In 
the  fifteenth  century  the  pious  and  learned  Gascoigne  has  not  a 
good  word  to  say  for  any  of  them,  but  comisels  their  suppression. 

It  was  necessary  for  me  to  give  this  sketch  of  the  state  of  the 
clergy,  regular  and  secular,  in  England,  up  to  at  feast  the  middle  of 
the  fourteenth  century,  because  one  cannot,  without  it,  explain  the 
force  and  persistence  of  that  singular  movement  which  began,  as 
usual,  at  Oxford  in  the  fourteenth  century.  I  am  referring,  of 
course,  to  the  political,  polemical,  and  social  career  of  Wikhf.  It  ia 
not  a  little  remarkable  that  all  the  great  religious  movements  in 
England,  from  the  earliest  to  the  latest,  had  their  origin  in  Oxford. 
Some  of  the  earhest  intimations  which  we  get  of  the  existence  of  a 
university  or  of  schools  of  teaching  in  this  place  is  the  narrative  of 
the  discovery  made  of  some  heretics  at  Oxford  in  Henry  the  Second's 
reign,  who  were  expelled  and  outlawed  from  Oxford,  and  perished 
because  no  one  dared  to  shelter  them.  The  University  of  Oxford, 
when  under  the  influence  of  Grostete,  appears  to  have  welcomed  the 
begging  friars,  of  whom  the  Bishop  of  Lincoln  had  so  high  an 
opinion.  In  the  next  century  the  opinions  of  Wiklif  were  developed 
here.    In  the  following  century  Pecok,  the  premature  advocate  o 


74    THE  SOCIAL  EFFECT  OF  BELIGIOVS  MOVEMENTS. 

Eationalism,  was  an  Oxford  man  ;  and  at  the  end  of  the  centnry, 
the  revival  of  letters  in  England,  distinctly  associated  with  Church 
Reform,  but  with  an  unaltered  creed,  in  the  hands  of  Erasmus,  Colet, 
and  More.  The  splendid  schemes  of  Wolsey,  intended  to  give  effect 
to  this  ref(>rm,  but  rendered  abortive  by  his  sudden  disgrace,  were  to 
have  been  earried  out  at  Oxford.  After  the  reformation  was  accom- 
plished, the  Puritan  movement  under  Sampson,  and  the  literary 
one  under  Laurence,  were  commenced  in  Elizabeth's  reign.  Later 
on  it  is  the  home  of  the  Laudian  reaction.  In  the  eighteenth 
century  it  originated  a  movement,  by  the  action  of  the  brothers 
Wesley,  which  has  had  well-nigh  as  wide  and  lasting  an  influence 
as  that  of  Wiklif,  and  simultaneously  developed  the  deistical  tenets 
Toland  and  Tindal,  which  were  certainly  not  as  obscure  and  unim- 
portant as  some  have  made  them.  Lastly,  it  was  the  origin  and 
centre  of  the  AngHcan  movement,  which,  however  it  has  been 
criticised,  has  affected  the  action,  if  not  the  ritual,  of  those  churches 
which  have  declared  the  strongest  antagonism  to  it.  The  cause  of 
this  singular  phenomenon  was  probably,  for  the  most  part,  the  extra- 
ordinary privileges  and  exemptions  which  the  University  enjoyed. 
It  was  certainly  self -governed,  and  its  authority  over  its  own  students 
was  declared  to  be  independent  of  bishop  and  pope.  Many,  too, 
believed  that  the  course  of  its  studies,  under  which  the  most  sacred 
questions  were  customarily  attacked  and  defended,  lent  no  Httle  aid 
to  the  sceptical  tone  which  characterized  the  writings  and  conversa- 
tion of  its  members. 

In  1805,  Philip  le  Bel,  who  had  quarrelled  with  Boniface  VIII., 
contrived,  after  the  short  reign  of  the  successor  of  Boniface,  to  secure 
the  election  of  a  pope  who  would  be  entirely  devoted  to  the  French 
king's  interests.  This  was  the  Archbishop  of  Bordeaux,  who  took 
the  name  of  Clement  V.,  and  migrated  to  Avignon.  Hi^  successors, 
up  to  the  epoch  of  the  great  Schism  in  1378,  were  all  Frenchmen, 
and  all  resident  at  Avignon.  This  was  not,  indeed,  part  of  the 
French  king's  possessions,  but  it  was  hemmed  in  by  them.  Now 
during  the  last  thirty-five  years  of  this  period,  Edward  III.  was  a 
claimant  of  the  French  throne,  under  a  title  which  many  jurists,  and 
French  jurists  too,  thought  valid,  and  the  Avignon  Pope  was  very 
generally  deemed  to  be  the  English  enemy,  using  his  spiritual  power 
for  the  purpose  of  aiding  and  abetting  the  French  usurper.   Attacks, 


THE  SITUATION  IN  WIKLIF'S  DAYS.  75 

therefore,  on  the  authority  of  the  Pope  were  Hkely  to  be  tolerated,  if 
not  welcomed. 

The  regular  revenues  of  the  Roman  see  were  impoverished  or 
suspended  during  the  Babylonish  captivity,  as  the  residence  at 
Avignon  was  described,  and  the  pontiffs  cast  about  for  some  new 
sources  of  extraordinary  revenue.  They  brought  causes  to  the  Papal 
courts  of  law,  for  I  have  discovered  and  published  the  details  of 
some  among  them,  original  and  appellate,  where  the  delay  was  great 
and  the  costs  excessive.  The  fees  paid  to  lawyers,  all  licensed  by 
the  Pope  f6r  a  round  sum  paid  down,  were  for  the  times  very  high. 
They  created  places  for  Hfe,  in  consideration  of  present  payment, 
and  quartered  such  people  upon  their  spiritual  subjects  in  order  to 
secure  the  income  promised.  One  of  them  invented  the  doctrine  of 
firstfruits,  under  which  he  reserved  to  himself  the  first  year's 
revenue  of  all  benefices  in  Christendom.  But  the  greatest  grievance 
of  all  was  the  habit  which  the  Pope  got  into  of  putting  his  nominees 
into  vacant  benefices,  without  regard  to  the  rights  of  patrons,  and 
even,  by  what  were  called  letters  of  provision,  nominating  persons  in 
expectancy  or  succession  to  these  benefices,  before  they  were  vacant. 
The  vast  sums  obtained  by  these  means  were  transmitted  to  Avignon 
by  bills  drawn  on  Flemish  merchants,  who  traded  with  the  English 
sheepmasters,  and  the  English  public  indignantly  insisted  that  the 
Pope  regularly  extorted  on  one  pl^a  or  another  as  much  money  out 
of  England  as  the  king's  own  revenue  came  to.  It  seems,  too,  that 
other  nations  used  to  laugh  at  the  patience  with  which  England 
allowed  itself  to  be  plundered.  And  when  we  add  to  this  the  real 
or  reputed  leaning  of  the  t'rench  Popes  to  the  French  king's  cause, 
it  is  plain  that  there  were  all  the  elements  of  a  pretty  quarrel  in 
existence.  I  suspect,  had  the  Enghsh  Companies  caught  the  Pope, 
they  would  have  treated  him  as  harshly  during  the  war  as  Nogaret 
did  Boniface  VIII. 

Wikhf  is  supposed  to  have  been  bom  at  a  Yorkshire  village  of 
that  name  in  or  about  the  year  1324.  His  collateral  relations  are 
said  to  have  dwelt  there,  some  generations  after  the  Reformation, 
and  to  have  remained  staunch  adherents  of  the  old  faith.  The  day 
of  his  death  is  certainly  known,  the  last  day  of  the  year  1384.  I 
suspect  his  birth  was  at  an  earlier  date  than  that  ordinarily  alleged. 
He  was  educated  at  Oxford,  where  is  not  known.     He  was  certainly 


76    THE  SOCIAL  EFFECT  OF  BELIGIOUS  MOVEMENTS, 

a  fellow  of  Merton,  and  probably  master  of  Balliol.  He  was  an  ex- 
ceedingly popular  person  at  Oxford,  where  he  received  from  the 
University  the  title  of  Doctor  Evangelicus. 

In  imitation  of  Aquinas,  perhaps  with  the  purpose  of  superseding 
him  among  his  Oxford  pupils,  Wiklif,  before  his  political  career 
began,  wrote  his  Summa  Theologi®,  under  the  title  of  "De  Dominio 
civili."  Some  of  the  tenets  promulgated  in  this  work  were  familiarly 
quoted,  notably  his  famous  maxim  that  Dominion  is  fomided  in 
Grace.  I  felt  convinced  many  years  ago  that  he  meant  by  this  that 
all  human  authority  was  conditioned  by  the  worthiness  of  the  person 
exercising  it,  and  that  proved  unworthiness  was  a  valid  reason  for 
withdrawing  one's  allegiance.  I  can  well  imagine  that  as  long  as 
this  was  supposed  to  refer  only  to  the  French  Pope  at  Avignon,  who 
was  making  incessant  claims  on  England  and  English  benefices, 
the  language  might  pass  unchallenged,  and  be  even  acceptable. 
But  when,  in  course  of  time,  the  tenet  was  applied  to  authorities 
nearer  home,  it  excited  at  first  a  reasonable  alarm,  and  ultimately 
undisguised  hostility. 

This  work  of  Wiklif  s  was  long  supposed  to  be  lost.  Most  of  his 
writings  have  perished,  for  after  his  memory  was  condemned  at  the 
Council  of  Constance,  some  thirty  years  after  his  death,  and  his 
bones  dug  out  of  his  grave  at  Lutterworth  and  burnt,  dihgent  search 
was  made  for  his  writings,  and  those  which  were  found  were 
destroyed.  Still,  as  late  as  1453,  books  of  Wiklif  s  were  bought  at 
Oxford,  and  for  high  prices  too,  for  Oxford  University  in  the  fifteenth 
century  was  reputed  to  be  full  of  Lollards.  But  the  original  work 
has  latterly  been  found  at  Vienna,  and  has  been  partly  published. 
Many  of  his  works,  it  is  well  known,  were  taken  to  Bohemia  by 
some  Oxford  students,  where  they  were  eagerly  studied  by  the  sect 
who  were  afterwards  known  as  the  Hussites.  After  the  battle  of  the 
White  Mountain  in  1620,  the  Hussite  books  were  captured  and 
carried  to  Vienna,  where  they  probably  owe  their  preservation  to 
neglect. 

I  have  read  what  has  been  published  of  this  treatise,  and  I  confess 
that  Wiklif  s  style  is  not  attractive.  It  is  involved,  full  of  iteration, 
and  is  disappointing  from  the  frequent  hesitation,  not  to  say  evasions, 
of  the  author  in  stating  the  conclusion  which  he  evidently  has  in  his 
mmd.    But  I  could  not  doubt  that  even  at  this  early  part  of  his 


WIKLIF'S  SUMMA  THEOLOGIZE,  77 

career,  he  had  intended  to  imply,  by  his  famous  adage,  the  interpre- 
tation which  I  set  on  it.  Wiklif  s  doctrine  on  property  and  its 
rights  is  obscurely  but  unmistakably  communistic.  But  the  imme- 
diate application  of  his  doctrine  is  to  the  Church  and  the  monastic 
foundations  in  particular,  then  reckoned  to  have  absorbed  one-third 
of  the  land  of  England.  Now  these  tenets  would  not  be  unpopular 
in  Oxford,  where  the  majority  of  the  members  detested  the  monks, 
and  put  every  possible  academical  disability  on  them.  Nor  would 
they  be  unacceptable  to  public  men,  who  were  impatient  of  the 
continual  costs  of  the  French  war,  and  were  anxious  to  make  Church 
propei-ty  contribute  far  more  largely  to  public  purposes  than  it  was 
wont  to  do.  WikUf  gamed  the  friendship  of  John  of  Gaunt,  Sahs- 
bury,  and  Pembroke. 

The  opinions  of  Wiklif,  as  yet  to  all  appearance  only  political, 
gained  him  pubhc  employment.  In  July,  1374,  he  was  sent  in 
company  with  several  other  English  ecclesiastics  to  negotiate  with 
Gregory  XL  on  the  practice  of  Papal  provisions.  The  meeting  was 
at  Bruges,  and  was  apparently  successful.  Most  of  the  negotiators 
were  provided  for  with  preferment,  and  Wiklif  was  presented  to  the 
Hving  of  Lutterworth,  where  he  died.  Bijt  hostile  as  he  became  to 
thfi-Pope  and  finally  to  the  Pope's  doctrines,  he  remained  strongly 
Anglican  in  his  sympathies.  In  the  book  which  I  have  referred  to, 
his  special  admiration  is  reserved  for  Becket  and  Grosette,  and  he 
particularly  recommends  the  former  for  refasing  to  acquieece  in  the 
constitutions  of  Clarendon,  and  particularly  the  last,  which  pro- 
hibited the  ordination  of  villains'  sons  without  the  assent  of  their 
lords,  for  Wiklif  strongly  argued  against  the  naturalness  of  civil 
inequality. 

But  shortly  after  his  return  from  Bruges,  Wiklif  took  the  im- 
portant step  of  making  provision  for  the  dissemination  of  his  tenets, 
which  became  more  anti-papal  and  sceptical  as  time  went  on.  The 
expedient  seemed  simple  enough,  and  justified  by  numerous 
precedents.  He  founded  a  new.  order  of  poor  priests,  in  imitation, 
it  would  seem,  of  the  mendicant  friars,  who  had  now  become 
entirely  unpopular  with  the  reforming  party.  These  priests  were 
to  preach  Wiklif's  social  and  theological  doctrines,  to  spend  their 
lives  among  the  poor,  and  especially  the  upland  folk,  as  the 
peasants  were  called,  to  be  clad  in  russet,  i.e.,  coarse  undyed  brown 


78    THE  SOCIAL  EFFECT  OF  BELIGIOUS  MOVEMENTS. 

wool,  and  to  be  constantly  moving  from  place  to  place.  Their 
religious  character  and  migratory  habits  disarmed  suspicion,  and  no 
one  guessed,  perhaps  WikUf  least  of  all  himself,  what  dangerous 
emissaries  they  soon  became.  They  seized  with  avidity  on  that 
tenet  which  I  have  referred  to,  the  unnaturalness  of  civil 
inequality,  and  disseminated  it  everywhere.  They  were  under  no 
central  authority,  were  responsible  to  no  chief,  abbot,  or  general, 
but  were  simply  held  to  teach  evangelical  doctrine,  which,  if  the 
superiors  of  the  peasants  had  heard  them,  would  have  filled  such 
people  with  horror.  It  appears  that  they  acted  as  treasurers  to  the 
common  fund  which  the  workmen  collected,  and  to  have  had  pass- 
words and  a  jargon  of  their  own.  By  their  agency  the  action 
of  the  peasants  was  concerted  from  the  north  to  the  south  of 
England. 

Now  let  us  briefly  glance  at  the  condition  of  England  during  the 
early  years  of  Richard  II.  The  war  with  France  was  languishing  ; 
the  king  was  a  child,  but  married  to  Anne  of  Bohemia,  who  was 
reputed  for  many  a  year  afterwards  to  be  a  firm  favourer  of 
Wiklifs  doctrines.  People  were  tired  of  the  war,  not  im- 
poverished by  it.  The  labourers  were  generally  prosperous.  The 
higher  wages  which  they  had  struggled  for,  and  at  last  obtained, 
were  sufficient  not  only  for  them  to  live  in  such  plenty  as  would 
leave  them  enough  to  subscribe  to  their  common  fund,  but  even  to 
save  from.  There  was  a  considerable  growth  of  manufactures  in 
the  eastern  counties,  owing  to  the  immigration  of  the  Flemings, 
and  these  woollen  manufactures  were  spreading  over  the  east,  south, 
and  west  of  England.  These  people  eagerly  embraced  the  doctrine 
of  the  poor  priests,  who  taught  them  the  tenets  of  religious 
equality  and  natural  freedom,  and  pressed  into  their  service  the 
lessons  of  the  Old  Testament,  in  which  they  alleged  that  the  true 
polity  of  a  religious  nation  was  described  with  the  fidelity  and  truth 
of  inspiration.  Nothing  could  be  more  invigorating  than  the  Old 
Testament  story,  where  kings  were  made  to  bow  before  the  inspired 
prophet  and  teacher,  who  when  kings  were  remiss  was  zealous  even 
to  slaying.  Wikhf  had,  among  his  other  labours,  translated  the 
Bible  from  the  Vulgate  version  into  English,  and  his  book  became 
the  teaching  of  thousands,  and  a  treasure  to  those  who  could 
acquire  it. 


THE  POOB  PBIESTS  AND  THE  PEASANTRY.  79 

While  the  peasantry  were  being  stimulated  by  this  new  doctrine, 
and  fortified  in  their  judgments  by  the  examples  of  the  Old 
Testament,  especially  those  culled  from  the  heroic  age,  when  every 
one  did  that  which  was  right  in  his  own  eyes,  the  lords  strove  to 
make  their  burdens  heavier,  to  revive  the  long-commuted  right  of 
predial  servitude.  Here,  we  may  be  sure,  the  peasants  were  told  of 
the  young  Rehoboam,  surrounded  by  foolish  counsellors  as  that 
fooHsh  king  was,  and  despising  the  wiser  counsellors  of  his  father, 
the  Salisburys  and  the  Pembrokes.  To  your  tents,  0  Israel!  Then 
came  the  rising,  and  the  slaying  of  the  priest  who  was  over  the 
tribute,  the  victories  of  the  Bridge^  the  interview  at  Mile  End,  and 
the  tragedy  at  Smithfield. 

I  need  not  tell  you  the  history  of  the  insurrection  of  1881  its 
collapse,  and  the  practical  success  oi  the  peasantry  in  the  struggle. 
The  insurrection  seemed  to  be  suppressed,  but  its  ends  were 
obtained.  The  leaders  of  the  people  were  attainted  and  executed. 
Two  hundred  and  eighty-five  are  mentioned  by  name  in  the  Act  of 
Parliament,  four  of  them  being  beneficed  clergymen  in  Suffolk ; 
but  the  final  stroke  was  given  to  the  system  of  serfage.  The  nobles 
were  frightened,  and  deserted  the  cause  of  the  peasants  ;  the  poor 
priests  were  proscribed.  But  they  were  welcomed  and  hidden  by 
the  Norfolk  weavers.  One  of  them.  Wilham  White,  who  was  said 
to  have  been  sent  forth  by  Wiklif  himself,  seemed  to  have  a 
charmed  life.  Incessantly  hunted,  he  continued  to  elude  his 
pursuers.  At  last,  in  his  old  age.  in  1427.  he  was  caught,  and 
burnt  with  two  others,  his  companions,  in  the  Lollards'  pit,  outside 
the  Bishop's  Gate  at  Norwich,  and  on  the  other  side  of  the 
Wansum. 

In  European  history,  discontent  with  existing  reHgious  institu- 
tions, and  the  acceptance  of  heresy  on  speculative  topics,  have 
always  been  characteristic  of  manufacturing  regions.  It  was  the 
case  in  Toulouse  in  Southern  France,  in  Flanders,  in  Eastern 
England.  The  French  Huguenots  were  the  manufacturers  and 
merchants  of  that  country  in  the  seventeenth  century,  and  when 
they  were  expelled,  carried  with  them  their  skill  and  their 
capital.  Only  Italy  is  an  exception,  and  Italy  profited  so  greatly 
by  the  Papacy  that  it  was  not  disposed  to  quarrel  with  the  institu- 
tion, though  it  had  no  love  for  the  representative  of  it.    The 


4 


80     THE  SOCIAL  EFFECT  OF  BELIGI0U8  MOVEMENTS. 

\  Lollard  was  no  doubt  like  the  Puritan  of  two  centuries  later,  sour, 
reserved,  opinionative,  and  stiff.  But  lie  saved  money,  all  the  more 
because  he  did  not  care  to  spend  on  priest  or  monk,  friar  or 
pardoner.  He  sometimes  played  savage  tricks  on  objects  of 
popular  worship.  He  cut  down  crosses,  burnt  images,  and  gave 
scurrilous  names  to  sainted  and  holy  persons.  He  might  have 
taken  part  in  the  murder  of  Bishop  de  Moleyns  at  Portsmouth  in 
1450,  and  of  Bishop  Aiscough  in  the  same  year  at  Edyndon. 
LoUardy  in  Eastern  England  was  apparently  suppressed,  but  by  no 
means  extirpated.  The  Lollards  of  the  fifteenth  eagerly  embraced 
the  Eeformation  of  the  sixteenth  century,  and  were  the  most 
frequent  victims  of  the  reaction.  They  aided  the  Yorkist  party 
from  sheer  hatred  to  the  persecuting  Lancastrians,  and  when  the 
Yorkist  was  victorious  they  had  for  a  time  peace  in  their  dwellings. 
As  time  went  on,  they  swelled  the  ranks  of  Cromwell's  Ironsides. 
The  latest  historian  of  Norfolk  country  life  dwells  on  the  distrust 
which  the  East  Anglian  peasant  has  for  parochial  clergymen. 

In  the  researches  which  I  have  made  into  the  economical  con- 
dition of  England  for  the  last  six  centuries,  and  in  the  numerous 
facts  which  I  have  accumulated,  I  have  constantly  noticed  that 
religious  movements  have  had  social  effects  under  two  definite  con- 
ditions. The  evidence  on  the  subject  is  so  cumulative,  the  facts 
are  so  clear,  and  the  inference  so  obvious,  that  what  I  have 
to  say  on  the  subject  appears  to  me  to  be  a  measure  of  the 
success  with  which  a  religious  revival  or  propaganda  may  be 
anticipated. 

In  the  first  place,  the  effort  of  the  missionary  must  needs  be 
directed  to  the  material  as  well  as  the  moral  amelioration  of  the 
persons  or  classes  which  are  to  be  the  subject  of  the  mission.  If 
the  teacher  is  suspected  of  being  mainly  the  agent  of  the  civil 
power,  of  intending  to  assist  the  present  status,  of  supporting  the 
purpose  of  the  magistrate,  the  success  of  an  institution,  or  the 
policy  of  a  form  of  government,  he  will  be  distrusted  and  will  fail. 
A  Court  preacher  may  encourage  partisans,  may  stimulate  a 
persecuting  spirit,  may  rouse  that  which  is  already  in  sympathy 
with  him,  but  will  not  gain  new  followers.  But  in  al]  historical 
religions,  however  much  they  may  have  been  subsequently 
corrupted  by  priestcraft   and  statecraft,   the    preacher  has  held 


THE  CONDITIONS  OF  RELIGIOUS  MOVEMENTS.       81 

out  hopes  to  his  hearers  that  he  will  better  them.  This  is  the 
secret  of  the  success  which  attended  the  teachings  of  Zoroaster 
and  Buddha,  of  early  Christianity  and  early  Islam.  They  take 
advantage  of  existing  discontent,  and  preach  freedom,  the  loosening 
of  chains,  the  opening  of  prisons,  and  the  natural  equality  of  man, 
the  manifest  duty  of  the  secular  ruler.  They  always  allege,  though 
in  varied  phrase,  that  dominion  is  founded  on  grace.  They  may 
counsel  indifference  or  even  obedience  to  the  secular  ruler,  but  they 
always  propose  compensation  for  this  concession.  The  constant 
reproach  against  the  Anglican  Church,  I  do  not  say  justly,  is  that 
it  is  the  creature  of  compromise,  constituted  and  maintained  by  the 
secular  power  and  in  the  interests  of  the  secular  power  only.  This 
is  what  Selden  meant  when  he  commented  cynically  on  the  con- 
tempt with  which  the  public  looked  at  the  downfall  of  the  episcopal 
clergy  in  the  seventeenth  century.  **  It,"  people  said,  '*is  a  mere 
instrument  created  by  ecclesiastics,  courtiers,  and  king,  and  is 
intended  for  secular  uses."  What  English  clergyman  has  a 
thousandth  part  of  the  influence  possessed  by  the  Irish  parish 
priest,  and  freely  conceded  to  him  ?  The  Lollard  teachers,  the 
Bible  men,  the  known  men,  as  their  password  went,  strove  to  enlist 
the  converts  to  their  new  creed  by  profound  sympathy  and  ready 
aid  to  them  in  their  old  struggles. 

The  next  fact  is,  that  it  is  in  vain  to  attempt  a  social  revolution, 
a  material  improvement  in  the  condition  of  those  whom  the  teacher 
approaches,  except  in  times  when  prosperity  or  at  least  some  degree 
of  comfort  is  general.  I  am  speaking  of  new  agencies,  not  of 
those  which  are  long-standing  and  as  long  trusted.  In  the  history 
of  the  world,  I  know  nothing  so  unwearied  and  so  sedulous  as  the 
labour  of  the  Irish  priests  has  been,  from  the  dark  days  of  the 
Penal  Code  to  this  last  time,  in  which  the  Irish  are  beginning  to 
believe  that  the  eastern  sea  will  bring  them  justice  in  place  of 
oppression.  I  am  thinking  of  and  referring  to  a  different  set  of 
facts.  The  mission  of  the  poor  priests  would  have  had  no  audience 
in  an  age  of  despair  and  misery.  The  forces  of  society  make  short 
and  easy  work  of  the  outbreaks  which  despair  occasionally  instigates. 
The  insurrection  of  the  Jacquerie  in  France  in  the  fourteenth 
century,  of  the  peasants  in  Germany  in  the  sixteenth,  were  futile 
struggles,  fuU  of  ferocity  and  reprisals,  but  completely  repressed, 

7 


82     THE  SOCIAL  EFFECT  OF  BELIGIOUS  MOVEMENTS. 

the  population  sinking  back  into  greater  misery  than  that  was  which 
they  strove  to  shake  off.  The  peasants'  war  in  England  was  an 
outcome  of  the  time  in  which  wages  were  high,  and  prices  were 
low.  The  peasant  of  that  age  was  better  off  than  his  father  or 
grandfather,  and  had  the  prospect  of  seeing  his  children  better  off 
than  himself.  They  claimed  at  Mile  End  to  be  free,  themselves, 
their  heir^,  and  their  lands,  and  to  be  no  more  bond,  nor  so 
reputed,  v  There  is  no  good  in  preaching  social  equality  to  the 
indigent  and  destitute,  to  the  man  who  asks  for  bread  or  work. 
Men  combine  and  organize  when  they  are  not  obhged  to  be  con- 
stantly anxious  about  their  daily  bread ;  when  that  is  lacking  or 
uncertain,  their  worst  language,  heaven  help  them,  is  that  of 
impotent  menace.  The  message  of  Wiklif's  priests  would  have 
seemed  a  mockery  to  the  destitute.  It  was  because  they  had  some- 
thing to  lose,  much  to  lose,  that  they  resolved  on  striking  a  blow 
to  gain  more.  It  was,  I  believe,  from  the  consciousness  of  how 
dangerous  fairly  prosperous  men  are,  that  the  Enghsh  administra- 
tion, its  first  burst  of  wrath  over,  treated  the  peasants  so  gently, 
and  silently  granted  their  demands. 

The  peasant  of  the  fourteenth  century  struck  a  blow  for  freedom 
in  the  fashion  which  noblemen  and  merchants  had  taught  him  or 
his  fathers  over  and  over  again,  against  John  and  Henry  and  the 
second  Edward ;  as  they  were  soon  going  to  show  him  against 
the  king  round  whom  they  now  ralHed,  and  in  whose  company 
on  that  Smithfield  day  was  the  young  cousin  who  was  to  depose, 
perhaps  to  murder  him.  He  struck  a  blow,  and  he  won.  His 
descendants  through  the  long  night  of  the  last  half  of  the 
sixteenth  and  the  seventeenth  centuries  were  to  sink  deeper  and 
deeper  by  the  operation  of  well-devised  machinations  into  the 
apathy  of  despair,  from  which  many  of  them  have  not  even  yet 
risen.  The  peasant  of  the  nineteenth  century  has  neither  the 
spirit  or  the  hope  which  called  together  the  Men  of  Kent,  of  the 
East,  of  the  North,  in  1381.  The  times  indeed  are  changed ; 
other  instruments  are  employed  now  than  those  which  were 
customary  when  making  war  on  the  king  was  believed  to  be  the 
right  of  the  aggrieved  subject.  The  struggle  is  more  civil,  the 
victory  is  more  humane.  But  the  man  who  works  will  always 
have  to  struggle  for  his  own  against  the  man  who  spends,  and 


THE  TEACHING  OF  PECOK.  88 

needs  all  his  energy,  for  his  rivaLis„^n -Organization,  and  he  is  too 
apt  to  be  a  mob. 

A  strange  wave  came  over  the  fifteenth  century,  its  wonderful 
prosperity,  and  the  incredible  ferocity  and  bloodthirstiness  of  its 
nobles,  in  the  rationahsm  of  Bishop  Pecok.  His  work,  the  archa- 
isms of  style  and  fact  excepted,  reads  to  me  like  the  apologetic 
latitudinarianism  of  the  eighteenth  century,  or  the  sweet  reasonable- 
ness of  the  nineteenth.  **  Our  lot  has  fallen  in  pleasant  places, 
why  disturb  us  *?  You  may  be  right,  but  it  is  quite  as  likely  that 
you  are  in  the  wrong,  and  you  must  not  be  vexatious  and  dogmatic. 
To  quarrel  over  religion  is  foolish,  to  attack  established  forms  and 
practices  is  impertinent.  Whenever  a  man  finds  an  occupation 
which  suits  him,  he  is  quite  as  probably  doing  God  and  man  service 
as  you  think  that  he  is  not."  I  know  nothing  stranger  than  the 
sight  of  this  bishop,  bom  long  before  his  time,  preaching  the 
gospel  of  indifference  just  at  the  beginning  of  a  furious,  a  bloody, 
an  implacable  civil  war,  in  which  the  nobles  of  the  age  were  to 
tear  each  other  to  pieces,  the  ecclesiastics  of  the  age  were  all  to  be 
siding  with  the  victorious  party,  as  one  side  or  the  other  was 
uppermost,  and  all  were  hurrying  down  the  rapids  to  the  Niagara  of 
Henry  VIII. 

The  teaching  of  Pecok  was  proscribed,  as  the  teaching  of  WikHf 
was,  by  the  pious,  unworldly  founder  of  Eton  and  King's  College, 
Cambridge.  Henry  VI.,  during  his  whole  life,  was  incapable  of 
forming  a  judgment,  and  the  clauses  of  his  statutes  in  which 
the  heretical  bishop  and  the  heretical  preacher  were  impartially 
condemned  were  suggested  by  some  adviser  of  the  poor  king.  But 
the  two  systems  were  in  violent  contrast.  On  the  one  side  were  the 
secret  teachers  of  Norwich  weavers  and  small  farmers,  inculcating 
vigilance,  thrift,  secrecy,  contempt  for  ecclesiastical  pretension,  con- 
centration on  the  business  of  life,  but  with  a  high  ideal  of  personal 
rehgion.  On  the  other  was  the  well-to-do  bishop,  apologizing  for 
his  easy  and  well-to-do  brethren,  intreating  his  English  reading  audi- 
ence to  let  well  alone,  and  enjoy  the  benefits  which  a  wise  Providence 
and  a  beneficent  constitution  had  bestowed  on  them.  Out  of  the- 
teaching  of  the  Lollard  priests  was  to  come  in  the  fulness  of  time, 
the  stem  Puritanism  which  piled  up  wealth  and  wrath ;  out  of  the 
teaching  of  the  others,  which  was  in  reality  a  reflection  from  tlie 


84    THE  SOCIAL  EFFECT  OF  BELI0I0U8  MOVEMENTS. 

practice  and  purposes  of  the  Anglican  Churcli  in  his  da}^  of  time- 
serving, greed,  and  suppleness,  was  to  come  the  horrible  chaos  of  the 
civil  war  of  succession,  the  ruin  of  Enghsli  prosperity,  the  enormous 
waste  and  crimes  of  Henrys  administration,  and  the  hopeless 
beggary  of  the  English  peasant. 

The  English  Eeformation,  such  as  it  was,  owed  very  little  to  the 
clerical  caitiffs  who  waited  on  Henry's  caprices.  All  its  strength 
was  due  to  the  secret  LoUardy  which  seemed  to  be  extinguished, 
and  was  so  active.  It  was  in  the  eastern  counties  that  Lollardy 
was  the  popular  religion,  that  the  Eeformation  of  Edward's  time 
flourished,  that  the  martyrs  of  Mary's  time  came,  that  the  resistance 
to  Elizabeth's  compromise  was  organized,  that  the  Puritan  move- 
ment, the  Independent  movement,  was  consolidated,  that  the  regi- 
ments of  the  New  Model,  the  Ironsides  were  trained,  that  Marston 
Moor  and  Naseby,  Dunbar  and  Worcestet  were  won. 

The  Puritan  movement  was  essentially  and  originally  one  of  the 
middle  classes,  of  the  traders  in  the  towns,  of  the  farmers  in  the 
country.  The  confusion  and  loss  which  followed  on  the  debasement 
of  the  currency  by  Henry,  and  the  restoration  under  Elizabeth, 
when  the  money  was  to  be  taken  by  tale  instead  of  weight,  and 
prices  consequently  rose,  affected  principally  the  landowners  who 
lived  by  rent,  and  the  labourers  who  lived  by  wages.  The  former  were 
stinted,  because  the  social  and  economical  situation  was  as  yet  a  bar 
to  competitive  rents,  and  the  latter  were  finally  impoverished  by  the 
quarter  sessions  assessments.  But  the  inconvenience  was  lightest  to 
the  small  farmer,  who  cultivated  his  field  or  the  portion  of  the 
common  field  which  he  held  at  a  low  fixed  rent,  whether  his  estate 
was  one  of  inheritance  or  on  a  renewable  term,  and  who  lived,  in  the 
main,  on  the  produce  of  his  own  field  and  his  own  hands.  To  such 
persons,  money  prices  are  of  less  significance  than  they  are  to  any 
other  class,  for  but  httle  of  their  produce  is  really  exchanged  for 
money.  And  if,  as  is  highly  probable,  the  weaving  of  coarse 
woollens  and  linens  was  a  bye-industry  in  the  small  farmer's  house 
(it  certainly  was  in  more  considerable  mansions,  such  as  those  of 
Shuttleworth,  in  Gawlhorp  Hall,  and  Lord  Pembroke's  at  Worksop), 
the  profit  on  the  weaving  would  make  up  for  the  exalted  price  which 
was  required  for  implements  and  materials,  ju^t  as  in  Ulster,  when 
linen  weaving  was   a  universal   domestic  industry,  the  peasant 


TEE  SECTS  OF  THE  BEFOBMATION.  85 

fanner,  as  long  as  he  could  pay  his  rent  out  of  his  weaving,  was 
generally  indifferent  to  its  amount.  But  I  am  sure  that  the  labourer 
and  artisan  had  no  interest,  as  they  had  no  part  in  the  marvellous 
drama  of  the  seventeenth  century,  when  the  war  between  the 
prerogative  and  the  people  began  with  Cecil's  book  of  rates,  and 
ended  with  the  second  Revolution  of  1688. 

The  stir  of  the  firat  Revolution  in  1642  brought  into  existence, 
perhaps  in  many  cases  only  brought  into  prominence,  a  number  of 
new  sects,  the  most  important  of  which  were  the  Quakers  and  the 
Independents.     The  former,  in  the  end,  generally  settled  in  the 
comitry  and  betook  themselves  to  agriculture,  the  latter  aggregated 
in  the  towns.     The  Society  of  Friends,  quiet,  self-restrained,  pains-  ! 
taking,  and  parsimonious,  who  cut  away  from  their  lives  all  super-  , 
fluous  and  some  innocent  enjoyments,  became  the  most  enterprising  ■ 
of  farmers,  and  had  not  a  httle  to  do  with  the  success  of  the  new  ; 
agriculture  in  the  eighteenth  century,  when  their  harmless  and  | 
unobtrusive  lives,  perhaps  the  success  of  their  industry,  caused  them  ; 
to  be  generally  respected.     Some  of  the  best  agricultural  reports  in 
Young's  collections  are  the  work  of  Quaker  farmers.     But  in  the 
end,  resistance  to  the  pajrment  of  tithes,  which  seems,  at  first,  to 
have  been  a  pious  opinion,  subsequently  exalted  into  a  religious 
dogma,  was  found  incompatible  with  a  pursuit  for  which  the  Friends 
were  peculiarly  fitted.     It  appears  that  the  abandonment  of  agTi- 
culture  as  a  calling  by  the  Quakers,  took  place  generally  in  the 
early  part  of  the  present  century. 

The  Independent  movement  had  a  far  more  important  economical 
history.  The  Independents,  as  the  reader  of  English  history  knows, 
were  the  Republican  party  of  the  seventeenth  century.  The 
Presbyterians  were  moderately  royalist,  the  Cavaliers  vehemently 
royahst,  the  clergy  were  eager  to  avenge  their  losses  in  the  civil 
war,  and  the  labourers  apathetic  and  indifferent.  The  Presby- 
terians were  tolerated  in  consideration  of  the  services  they  did  at 
the  Restoration,  were  even  endowed  to  a  small  extent,  or  allowed 
to  be  endowed.  They  are  now  represented  by  the  small  and  scattered 
Unitarian  congregations  in  out-of-the-way  villages,  and  by  a  more 
numerous  and  compact  sect  in  the  North  of  England.  Independency 
became  the  religion  of  the  large  towns,  especially  of  London.  The 
sect,  of  course,  was  the  most  hateful  to  the  restored  monarchy  and 


86    TEE  SOCIAL  EFFECT  OF  BELIGIOUS  MOVEMENTS. 

the  restored  Church.  Had  it  been  possible,  they  would  have  been 
visited  with  the  utmost  severity  of  the  Clarendon  persecuting  Acts. 
But  these  sectaries  rapidly  grew  rich,  and  out  of  the  trade  which 
flourished  exceedingly  in  the  last  quarter  of  the  seventeenth  century, 
they  became  the  moneyed  interest  of  London.  No  doubt  Charles 
would  have  gladly  pillaged  them,  as  he  pillaged  his  own  adherents 
in  1672,  when  he  shut  up  the  exchequer.  But  the  boundless  extrava- 
gance of  his  Court  always  kept  him  poor,  and  he  had  no  mind,  as  he 
said,  to  go  on  his  travels  again,  as  I  am  pretty  certain  he  would,  had 
he  hved  much  longer,  as  he  assuredly  would  if  he  had  attempted  his 
father's  pranks  of  illegal  taxation.  The  Independent  sect  of  the 
city  of  London  gave  stability,  because  it  gave  money,  to  the  second 
Eevolution.  It  gave  its  money  on  loan,  in  a  business-like  way,  and 
it  took  security,  as  is  the  custom  of  merchants.  The  Presbyterians 
of  the  first  Eevolution  gave  their  money  freely  to  the  Parhamentary 
cause.  Now  the  creation  of  the  Public  debt  gave  a  diffused  interest 
to  the  New  Settlement. 

The  Independents  were  the  principal  founders  of  the  Bank  of 
England.  Among  the  first  directors  were  Abney,  the  patron  of 
Dr.  Watts,  three  of  the  Iloublons,  who  had  originally  been  Flemish 
exiles,  and  were  firm  adherents  of  Calvin's  discipline,  and  a  host  of 
other  names  who  can  be  identified  with  London  Nonconformity.  To 
do  busLQess,  State  business,  with  such  persons,  and  to  visit  them 
with  penalties  for  their  creed  and  discipline  was  an  absurdity. 
Toleration  was  the  necessary  outcome  of  the  new  finance,  as  it 
was  of  the  new  political  system.  The  landed  interest  hated  them, 
but  their  hatred  was  impotent.  Once  they  tried  to  ruin  the  Bank 
with  a  scheme  of  their  own,  the  collapse  of  which  made  them  more 
furious  and  helpless.  The  sons  of  Zeruiah,  as  the  High  Church 
clergy  confessed,  were  too  strong  for  them. 

There  was  still  an  institution  which  was  almost  entirely  in  the 
hands  of  the  monied  Tories  who  had,  I  believe,  finally  parted  com- 
pany with  the  Stuarts,  but  who  hated  the  Whigs  and  the  Dissenters. 
Under  a  charter  from  Elizabeth,  the  East  India  Company  had 
grown  from  small  beginnings  to  what  was  then  a  mighty  trade. 
Their  stock  often  sold  four  or  five  times  its  nominal  value,  when 
profits  were  high.  But  Parliament  had  affirmed  that  it  alone  was 
empowered  to  confer  monopolies  of  trade.     The  old  Company  saw 


THE  INDEPENDENTS  AND  THE  BEVOLUTION.         87 

the  ground  cut  from  under  their  feet,  after  they  had  spent  in  vain 
large  sums  in  bribiQg  members  of  the  House  of  Commons,  among 
them  the  Speaker,  and  the  members  of  the  House  of  Lords.  In 
1692,  its  stock  reached  158 ;  in  1696,  it  fell  to  88. 

The  "Whigs  determined  on  constructing  a  new  and  rival  East  India 
Company,  the  stock  of  which  was  readily  and  rapidly  subscribed  by 
the  London  Dissenters.  It  soon  shot  well  ahead  of  the  old  society, 
though,  strange  to  say,  the  old  company  bettered  itself  considerably 
during  the  period  of  rivalry,  which  only  lasted  a  few  years.  Perhaps 
they  distributed  their  dividends  honestly  instead  of  using  their  profits 
for  the  sake  of  pohtical  corruption.  In  the  autumn  of  1703,  just 
before  England  had  taken  decided  action  in  the  war  of  the  Spanish 
succession,  the  stock  of  the  old  company  was  at  134,  of  the  new 
at  219. 

The  traditions  of  the  Eevolutionary  period,  and  the  attitude  of  the 
city  men  towards  Nonconformity  and  the  principles  of  1688,  re- 
mained active  during  the  eighteenth  century.  Wilkes  was  a  Non- 
conformist, and  no  great  credit  to  any  sect.  The  city  took  up  his 
defence,  sheltered  him  from  pursuit,  baffled  the  House  of  Commons 
in  their  attempt  to  protect  their  debates  from  publication,  forced 
Bute  out  of  office,  and  administered  bold  rebukes  to  the  king  him- 
self, after  making  very  offensive  demonstrations  against  his  mother. 

In  a  minor  degree,  the  principal  business  in  the  other  large  towns 
was  in  the  hands  of  the  same  theological  and  political  party,  and 
not  a  Uttle  of  the  remarkable  material  progress  which  characterized 
the  eighteenth  century  was  due  to  these  agencies.  Mr.  Gladstone 
has  disputed  the  accuracy  of  the  picture  which  Macaulay  drew  of 
the  beggarly  and  sordid  condition  of  the  clergy  in  the  seventeenth 
and  early  part  of  the  eighteenth  centuries.  I  can  only  say  that  my 
researches  entirely  confirm  the  historian's  description. 'Their  in-| 
fluences  lay  through  the  traditions  of  the  Parliamentary  war,  with 
the  country  landowners  and  those  of  their  tenants  who  deferred  to 
them.  ^  I  do  not  think  that  the  Squires  Westerns  honoured  the 
Church  in  the  person  of  Parson  Trulliber,  as  neither  of  them  were 
any  great  credit  to  the  country  party  and  the  Church,  but  they  voted 
together,  and  I  am  old  enough  to  remember  country  clergymen  of 
whom  Parson  TruUiber  was  hardly  a  caricature.  The  grievances  of 
a  standing  army,  a  public  debt,  and  the  land  tax,  were  till  the  great 


88    THE  SOCIAL  EFFECT  OF  BELIGI0U8  MOVEMENTS. 

rise  in  prices,  rents,  and  tithes  at  the  end  of  the  eighteenth  century, 
sufficient  to  weld  together  the  poHtical  interests  of  Church  and 
land. 

The  Eevolution  of  1688  would,  I  believe,  have  been  followed  by 
a  reaction,  possibly  a  restoration  of  the  Stuarts,  had  it  not  been  for 
monied  Whigs  of  the  great  towns,  and  especially  of  London.  The 
public  men  of  the  period  were  corrupt,  were  always  looking  out  for 
questionable  official  gain,  and  the  first  two  kings  of  the  house  of 
Hanover  were  not  respected  and  were  not  respectable.  Now  the 
country  party  would  probably  have  been  as  bad  as  the  Whigs  if  they 
had  had  the  chance,  and  the  Whigs,  who  in  one  shape  or  the  other 
were  m  office  from  the  accession  of  the  first  till  the  death  of  the 
second  George,  were  not  hkely  to  attack  the  most  sohd  supporters 
which  their  party  had.  So  the  occasional  Conformity  and  the 
growth  of  Schism  acts  soon  went,  and  though  the  disability  of  the 
Dissenter  remained,  as  long  as  he  did  not  present  a  qualification 
the  enforcement  of  which  was  a  public  scandal,  means  were  found 
by  which  the  clergy,  for  a  solid  consideration,  gave  their  testimony 
that  the  requisite  appearance  and  participation  had  been  satisfac- 
torily fulfilled,  when  the  person  who  promised  it  had  not  entered  the 
church. 

The  movement  which  the  brothers  Wesley  began  and  carried  out 
was  chiefly  among  the  labouring  classes.  It  is  well  known  that 
Wesley  intended  to  merely  introduce  a  reform_ among  reputed  mem- 
bers of  the  Church  of  England,  and  that  the  intolerance  of  those 
who  were  ofi'ended  at  his  tacit  rebuke  of  their  sloth  and  indifference 
drove  him  reluctantly  from  his  purpose.  But  I  am  strongly  con- 
vinced that  Wesley,  who  laboured  with  so  much  success  and  effected 
so  powerful  an  organization  in  the  eighteenth  century,  would  have 
wasted  his  labour  in  the  seventeenth.  Durmg  the  first  half  of  the 
eighteenth  century,  and  indeed  further  on,  prices  were  far  lower  than 
m  the  previous  century,  wages  rose  slightly,  but  were  only  slightly 
raised,  and  it  is  clear  that  most  labourers  were  small  occupiers  as 
well,  perhaps  under  the  Act  of  1589.  ;  There  was  therefore  in  the 
comparative  plenty  of  the  time  an  opening  for  a  religious  movement 
among  the  poor,  and  Wesley  was  equal  to  the  occasion.  It  survived 
the  terrible  period  of  the  Continental  war,  when  nearly  all  the  taxa- 
tion of  the  country,  so  universal  were  the  excise  and  customs,  fell 


THE  MOVEMENT  OF  TEE  WESLEYS,  89 

on  the  poor  earnings  of  the  working  classes,  for  it  is  a  maxim  in 
finance  that  there  is  no  tax  so  productive  as  that  which  is  collected 
from  imiversal  consumption.  At  the  present  time  the  protective 
taxes  on  clothing  levied  in  the  United  States  are  easily  evaded  by 
the  rich,  the  profits  of  the  manufacturer  are  extracted  from  the 
consumption  of  those  who  cannot  go  abroad  to  buy. 

I  do  not  doubt  that  the  remarkable  progress  of  the  working 
classes  in  the  fourteenth,  fifteenth,  and  first  half  of  the  sixteenth 
centuries  were  intimately  connected  with  the  destructive  criticism 
which  Wiklif  and  his  followers  brought  to  bear  on  the  established 
creed  and  its  representatives.  All  outward  show  of  the  opinions 
which  these  sectaries  entertained  was  repressed,  particularly  during 
the  Lancastrian  epoch.  But  they  were  understood  to  be  still 
secretly  cherished.  Pecok,  the  defender  of  the  existing  order  oi 
things,  exammes  and  attacks  the  tenets  which  seemed  to  have  been 
uprooted.  This  attack  betrays  a  suspicion  that  the  unseen  in  opinion 
is  not  always  unfelt.  I  do  not  doubt  then  that  the  views  oi  the 
early  reformers  were  still  prevalent  among  the  weavers  and  farmers 
of  Norfolk.  It  is  possible  to  extirpate  a  rehgion.  Calvinism  was 
destroyed  in  Flanders  and  Spain,  almost  entirely  in  France,  to  a 
great  extent  in  Southern  Germany.  But  the  process  was  effected 
by  an  elaborate  system  of  espionage,  and  the  relentless  punishment 
of  the  accused  offenders.  In  the  same  way  Eomanism  was  extir- 
pated in  Scandinavia,  and  by  expedients  as  harsh  and  severe.  Cruel 
and  violent  as  our  laws  on  religion  have  been,  they  have  not  been, 
and,  imless  the  character  of  the  English  were  entirely  altered,  could 
not  have  been,  effective.  The  High  Commission  Court  was  a  very 
poor  equivalent  of  the  Spanish  Inquisition. 

The  opulence  of  Norfolk  during  the  epoch  of  LoUardy  and  the 
textile  manufactures  is  shown  m  the  assessments  it  paid.  The  soil 
of  Norfolk  is  not  particularly  fertile,  being  mostly  light.  Much  oi 
its  present  acreage  is  reclaimed  from  the  sea  by  gradual  accretion  ; 
much  of  its  existing  surface  is  covered  with  water,  and  was  covered 
to  a  still  greater  extent  five  centuries  ago.  But  when  the  wool  tax 
was  levied  in  1341,  ihe  taxation  of  Norfolk  to  the  acre,  London  for 
the  moment  being  taken  out  of  Middlesex,  was  higher  than  that  oi 
any  English  county,  and  second  to  Middlesex  with  London.  Next 
to  it  comes  Oxford,  probably  the  most  fertile  of  the  EngHsh  counties, 


90    THE  SOCIAL  EFFECT  OF  BELIGI0U8  MOVEMENTS. 

as  it  has  so  much  natural  pasture,  and  so  Httle  waste.  In  1875 
when  another  assessment  is  made,  the  rate  per  acre  is  shghtly  higher 
in  Oxford  than  it  is  in  Norfolk,  but  these  two  counties  are  greatly 
richer  than  any  other.  Now  there  was  hardly  any  part  of  England 
which  suffered  so  severely  by  the  plagues  of  the  fourteenth  century 
as  Norfolk  did.  In  1453,  and  again  in  1503,  it  occupies  the  same 
position,  a  little  below  Oxfordshire,  but  far  above  any  other  county. 
These  are  the  only  assessments  which  I  have  found  in  the  pre- 
Eeformation  period.  Part  of  the  decline  is  no  doubt  due  to  the 
extension  of  the  woollen  manufacture  over  other  parts  of  England, 
for  the  assessments  are  of  a  fixed  grant,  and  are  therefore  relative. 
The  growmg  wealth  of  a  county  heretofore  backward  would  reduce 
the  contmgent  of  another,  which  had  not  indeed  declined,  but  had 
not  increased  as  the  other  had  in  the  interval. 

It  cannot,  I  think,  be  doubted  that  the  continuous  position  of 
Norfolk  during  the  space  of  more  than  a  century  and  a  half, 
between  the  first  and  last  of  these  assessments,  was  due  to  the 
habits  which  the  reUgious  and  social  tenets  of  the  Lollards  infused 
into  the  minds  of  those  weavers  and  farmers.  Many  of  them  were  of 
Flemish  descent,  indeed  in  catalogues  of  persons  which  I  have  found 
in  the  eastern  counties,  I  have  been  struck  with  the  frequency  of 
distinct  Teutonic  names.  They  kept  up  a  close  intercourse  with 
Flanders.  They  could  not  do  much  in  the  way  of  wool.  Their 
produce  was  not  deemed  worthy  of  a  price.  But  that  from  Suffolk 
is  the  cheapest  in  the  kingdom,  and  probably  the  worst.  But  they 
exported  their  barley  largely  to  the  Low  Countries,  and  received  in 
return  the  hop,  which  they  appear  to  have  been  the  first  to  use, 
nearly  a  century  before  it  became  general  in  England,  and  recovered 
the  art  of  making  brick,  which  had  been  lost  in  England  since  the 
days  of  the  Eomans.  This  progressive  skill,  in  which  they  out- 
stripped the  rest  of  the  country,  was  due  to  special  causes,  and,  in 
my  judgment,  it  was  due  to  their  religion.) 

I  have  nowhere  discovered,  to  my  great  regret,  any  assessment 
between  1503  and  1636,  when  the  charge  of  ship  money  was  im- 
posed. Norfolk  is  now  ranked  as  the  twenty-fifth  of  the  counties. 
It  is  seventh  in  1641  and  1649,  eighteenth  in  1660,  twelfth  in 
1672,  nineteenth  in  1695.  But  in  the  only  two  assessments  which 
I  have  seen  of  towns,  in  1641  and  1649,  Norwich  is  the  second 


THE  ANCIENT  PBOSFEBITY  OF  NORFOLK.  91 

city  of  the  tingdom.  No  doubt  part  of  this  change  is  due  to  the 
migration  of  its  industries,  as  the  revival  at  the  time  of  the  Parha- 
mentary  war  is  to  the  development  of  a  new  industry  in  the  county. 
In  the  days  of  LoUardy  it  prospered  greatly,  but  when,  in  spirit 
if  not  in  name,  the  principles  which  Wikhf  taught  were  accepted 
by  the  Anglican  Church,  and  Wikhf  was  styled  the  morning  star 
of  the  Eeformation,  the  special  prosperity  of  Norfolk  had  passed 
away.  But,  for  a  long  time,  a  **  weaver  "  was  the  familiar  synonym 
for  a  heretic. 


DIPLOMACY  AND  TKADB. 

Copiousness  of  diplomatic  literature — The  effect  of  the  intercourse  of 
nations — Fallacies  about  money,  and  its  place  in  commerce — Ex- 
ports and  imports — How  does  a  nation  spend  more  than  it  earns — 
Proof  of  such  a  state  of  things — Early  trade  of  England,  the 
Hanseatic  League — Trade  with  Flanders  and  elsewhere — Boutes 
from  the  East — The  discovery  of  the  New  World,  the  Cape  Passage, 
and  the  conquest  of  Egypt  by  the  Turks — Inherent  errors  in 
the  Dutch  trade — The  Intercursus  Magnus — Commercial  treaties — 
1.  That  of  Mr.  Methuen,  2.  That  of  Mr.  Eden.  8.  That  of  Mr. 
Cobden. 

It  will  be  obvious  to  you  that  I  can  treat  this  vast  subject  only  in 
outline.  There  is  very  little  printed  literature  which  is  more  copious 
than  that  which  deals  with  diplomacy  and  trade.  The  great  work 
of  Dumont  proposes  to  give  up  to  the  middle  of  the  eighteenth  century, 
the  various  treaties,  political  and  commercial,  which  have  been 
negotiated  between  the  different  states  of  Europe.  The  numerous 
volumes  of  Eymer,  historiographer  to  Charles  II.,  are  a  selection  from 
the  public  papers  which  are  preserved  in  the  national  archives.  But 
neither  of  these  authors  is  as  copious  as  Muratori,  whose  volumes 
are  a  repertory  of  the  infinitely  various  relations  which  subsisted 
from  time  to  time  between  the  numerous  Italian  cities.  The  col- 
lection of  Muratori  is  not  only  interesting  to  the  student  of  modern 
history,  but  is  valuable  as  it  enshrines  in  it  many  scattered  pieces 
of  information  about  ancient  commercial  law,  the  most  ancient  and 
continuous  of  all  law,  for  it  is  probable  that  this  branch  of  inter- 
national custom  and  comity  reaches  back  to  the  time  when  the  Rome 


EFFECT  OF  THE  INTERCOUBSE  OF  NATIONS.         93 

of  the  kings  and  the  early  republic  made  treaties  with  Carthage  ant. 
the  other  colonies  of  Tyre. 

The  economical  benefits  of  trade,  and  of  that  understanding 
between  nations  which  leads  to  the  exchange  of  products,  which 
protects  merchants  and  merchandize,  and  gives  temporarily  to  the 
foreigner,  under  more  or  less  easy  conditions,  the  opportmiities  of 
commerce,  are  obvious  and  trite.  The  distribution  of  products  to 
the  greatest  possible  reciprocal  advantage  is  the  first  and  most 
enduring  stimulant  to  trade.  In  all  acts  of  exchange  the  buyer  has 
the  strongest  inducement  to  get  what  he  most  needs,  and  in  com- 
merce both  parties  buy  and  both  parties  sell.  Trade  is  again  the 
most  efficient  instructor  as  to  the  natural  benefits  of  soil,  climate, 
and  material,  and  it  teaches  this  with  the  greatest  rapidity  and 
accuracy.  The  greatest  service  which  unimpeded  trade  does  to  a  f\ 
community  which  has  accepted  it,  is  that  it  informs  the  people,  who 
desire  to  exchange  their  products,  what  are  the  best  hinds  of  material 
on  which  to  exercise  their  industry,  and  develop  that  utility  which 
is  the  sole  end  of  economical  labour.  Hence  it  supplies  the  answer 
to  the  important  problem — Has  the  industry  in  which  a  country  is 
engaged  been  determined  on  in  the  most  productive  direction,  does 
it  produce  the  greatest  possible  results  with  the  least  possible  ex- 
penditure of  force  ?  Hence  it  acts  as  a  stimulant  for  the  discovery 
of  labour-saving  instruments,  and  ol  cost-saving  processes,  for  any 
waste  is  labour  needlessly  and  unprofitably  expended.  It  leads  to 
the  discovery  of  natural  resources,  as  in  this  country  coal,  salt,  and 
iron,  the  last  two  of  which,  before  certain  discoveries  were  made, 
were  imported  into  this  country.  In  the  fifteenth  century  it  was 
supposed  that  if  the  exportation  of  French  salt  was  prohibited 
or  even  hindered,  a  most  powerful  instrument  for  checliing  English 
progress,  or  crippling  England's  domestic  life,  would  be  put  into 
operation. 

Trade,  again,  is  an  effective  means  for  the  development  of  inter- 
national morality,  for  the  sense  of  reciprocal  benefit  teaches  the 
}eality  of  reciprocal  rights,  and  the  recognition  of  rights  in  the 
people  of  a  foreign  country  is  obviously  a  means  by  which  people 
are  instructed  in  that  sense  of  justice  and  the  satisfaction  of  obliga- 
tions -which  is  the  earliest,  and,  it  would  seem,  the  most  difficult 
lesson  of  civilization.   The  difficulty  there  is  in  inculcating  the  force 


94  DIPLOMACY  AND  TRADE. 

of  reciprocal  obligations  appears  to  me  to  be  the  reason  why,  in  the 
early  ages  of  jurisprudence,  the  law  enforcing  contracts  has  con- 
stantly been  so  severe,  that  in  course  of  time  the  severity  imperils 
the  very  foundations  of  society  itself,  and  it  becomes  necessary  to 
modify  the  ancient  code  by  enacting  a  law  of  usury,  in  which  reHef 
is  given  to  the  debtor,  and  in  modern  times,  by  what  is  equivalent 
in  its  effects  and  virtually  in  its  principle,  a  law  of  bankruptcy  or  a 
revision  of  contracts.  The  international  morality  which  has  been 
induced  by  trade  in  course  of  time  develops  that  which  is  called 
international  law,  i.e.y  international  comity,  the  force  of  which  is 
public  opinion  and  the  censure  of  other  nations,  an  expedient  by 
which,  it  may  be  hoped,  as  these  forces  become  more  effectual,  war 
may  become  itself  an  anachronism.  Perhaps  in  past  times,  the 
Enghsh  people,  by  insisting  on  extravagant  rights  on  the  high 
seas,  have  been  the  greatest  hindrance  to  the  development  of  inter- 
national comity ;  but  of  late  years,  and  apparently  from  conviction, 
we  ourselves  have  been  among  the  foremost  to  suggest  that  the 
barbarisms  of  ancient  warfare  shall  be  discarded  by  international 
consent.  ' 

Few  nations  are  so  barbarous  as  not  to  recognize  the  importance 
of  trade.  But  as  that  which  they  sell  is  by  the  very  act  of  exchange 
that  which  they  desire  less  than  that  which  they  receive,  they  are 
naturally  most  interested  in  exports.  Another  circumstance,  how- 
ever, has  led  to  a  further  anxiety  to  increase  exports,  the  motive  of 
which  is  more  obscure. 

It  is  clear  that  to  a  person  engaged  in  trade,  the  mere  retention 
of  money  is  not  desirable.  There  is  no  reason  to  believe  that  by 
holding  it  he  will  gain  an  advantage,  for  by  the  very  terms  of  its 
use  as  a  means  of  exchange,  it  varies  least  of  all  in  value  within 
measureable  time.  Except,  then,  as  it  gives  a  sense  of  security 
against  unforeseen  emergencies,  a  risk,  on  the  hypothesis  that  the 
trader  is  solvent,  which  is  progressively  diminished  in  civilized  com- 
munities, to  hoard  is  to  lose.  As  the  machinery  of  trade  becomes 
more  complicated  or,  to  be  more  accurate,  to  be  more  nicely  adjusted, 
movements  of  specie  from  country  to  country,  or  from  merchant  to 
merchant,  become  rarer,  and  the  transmission  of  the  precious  metals 
ceases  to  be  the  business  of  the  trader,  for  the  function  of  adjusting 
the  wants  of  the  money  market,  either  for  internal  circulation  or  for 


FALLACIES  ABOUT  MONEY.  96 

the  purpose  of  the  foreign  exchanges  becomes  the  special  office  of 
the  buUion  dealer.  This  view  of  the  entirely  secondary  functions  of 
money  in  trade,  and  of  its  being  to  the  dealer  a  mere  temporary  in- 
strument to  be  got  rid  of  as  soon  as  possible  in  trade,  if  profit  is  to 
be  made,  was  seen  very  early  in  the  history  of  economic  literature ; 
for  it  is  stated  clearly  enough  in  a  treatise  by  Nicholas  Oresme, 
Bishop  of  Lisieux,  in  the  fourteenth  century.  Money  is  a  convenient, 
the  only  convenient  measure  of  exchange  value  ;  it  has  a  temporary 
convenience  in  effecting  certain  exchanges,  but  the  trader  retains  it 
in  his  possession  for  the  shortest  possible  time.  In  brief,  he  takes 
it,  only  to  get  rid  of  it. 

The  case  is  entirely  different  with  a  government,  particularly  with 
a  government  in  the  time  at  which  Oresme  wrote.  Here,  and  for 
the  reason  given  above,  as  a  reserve  against  unforeseen  emergencies, 
the  acquisition  of  money,  the  creation  of  a  treasure,  the  value  of  a 
hoard,  were  instant  and  obvious.  In  the  nature  of  thmgs  a  govern- 
ment produces  nothing,  gets  no  profits.  It  may  be  in  the  highest 
decree  necessary  and  useful,  but  in  the  nature  of  things,  it  exists 
only  to  spend.  It  knew,  at  least  in  the  time  of  which  I  am  writing, 
that  the  strongest  power  was  that  which  had  or  could  get  most 
money.  Centuries  after  Oresme,  Louis  XIV.,  when  he  was  pressed 
by  the  reverses  of  unsuccessful  war,  consoled  himself  by  saying, 
*'  After  all,  it  is  the  last  pistole  that  wins."  In  the  sixteenth  cen- 
tury, all  Europe  was  aghast  at  the  designs  of  Philip  II.  of  Spain. 
He  had  the  great  mmes  of  the  New  World,  or  at  least  levied  a  heavy 
tax  on  their  produce.  He  seemed  to  be  possessed  of  inexhaustible 
riches.  He  was  bafiSed,  beaten,  made  bankrupt  by  the  Dutch,  in 
whose  country  there  was  not  an  ounce  of  natural  gold  or  silver,  who 
got  all  their  money  by  trade,  except  when  they  occasionally  captured 
their  enemy's  treasure  fleet,  and  were  rapidly  becoming  the  richest 
nation  of  Europe,  when  Philip  had  ruined  Spain  and  brought  down 
the  Genoese  traders,  on  his  declaring  himself  bankrupt. 

European  governments  interpreted  the  interests  of  their  subjects 
by  the  view  which  they  took  of  their  own  interests.  Merchants 
knew  then  as  they  know  now,  that  money  has  a  temporary  use  only 
to  the  individual  But  the  government,  seeing  the  permanent  use 
of  money  to  itself,  strove  to  make  it  permanent  in  the  community 
whose  affairs  they  administered.     So  they  devised  the  doctrine  of 


r 


96  BIFLOMACY  AND  TEADE, 

the  balance  of  bargain,  which  Adam  Smith  afterwards  called  the 
mercantile  system,  insisted  that  in  cash  transaction  with  foreign 
merchants,  there  should  be  a  balance  payable  to  the  English  dealer, 
limited  transactions  in  certain  important  English  products  to  towns 
which  they  called  staple  towns,  and  appointed  a  great  officer,  whom 
they  called  the  King's  Exchanger,  who  should  see  in  his  own  person, 
or  by  deputy,  that  this  desirable  balancevwas  secured. 

Of  course  they  did  not  succeed.  In  wie  existing  state  of  the 
police  of  the  ports,  they  might  as  well  have  tried  to  keep  in  the 
wind,  or  to  limit  a  falling  shower  to  English  soil.  Bigger  things 
than  money  are  smuggled,  and  when  the  merchants  knew  that  they 
could  only  carry  their  business  on  by  getting  rid  of  the  money  they 
had  received,  and  the  balance  of  bargain  too,  why  they  got  rid  of 
both.  If  the  royal  policy  had  been  successful,  there  would  have 
been  a  general  rise  of  prices.  There  would  have  been  more  money 
in  the  country  than  was  wanted,  and  to  get  rid  of  what  they  did 
not  want,  they  would  have  had  to  give  more  of  it  for  goods.  But  no 
rise  of  prices,  on  that  I  can  speak  confidently,  ensued ;  the  money 
flowed  out  to  where  it  was  wanted,  like  rivers  to  the  sea,  as  Oresme 
said,  and  the  King's  Exchanger  with  his  attendants  was  a  mere 
cumber  in  the  business  of  life. 

But  what  no  merchant  would  admit  for  himself,  he  affirmed  for 
the  whole  country.  The  balance  of  trade,  the  balance  of  bargain, 
the  mercantile  system  became  a  trouble  for  centuries,  and  when  this 
country  was  fast  becoming  the  first  commercial  centre  of  the  world, 
honest  people  tortured  themselves  about  the  excess  of  imports  over 
exports,  said  that  England  was  going  to  ruin,  and  that  we  were 
all  spending  more  than  we  were  earning.  I  am  afraid  that  the 
amount  of  exports  were  cooked,  in  order  to  comfort  these  worthy 
dreamers. 

The  exports  of  a  country  always  pay  for  its  imports.  If  they  did 
not,  the  importing  country  would  be  contracting  debts,  and  the  debt 
would  be  taken  in  lieu  of  imports.  It  is  always  possible  to  discover 
whether  a  country  is  spending  more  than  it  pays  for.  If  it  does,  it 
begins  to  export  securities.  A  comitry  may  very  wisely  spend  more 
than  it  pays  for.  It  may  very  necessarily  spend  more  than  it 
pays  for.  But  it  must  always  pay  for  its  imports  in  goods  or 
securities,  and  there  are  plenty  of  people  who  can  detect  the  opera- 


EXPORTS  AND  IMPORTS.  97 

tion  when  it  takes  place.  But  the  operation  is  not  always  plain  to 
the  unpractised  observer,  and  I  am  afraid  that  latterly,  some  persons, 
who  know  a  little,  have,  for  reasons  of  their  own,  practised  on  the  ill- 
informed.  When  a  country  is  not  borrowing  and  has  a  fair  share  in 
the  carrying  trade,  an  honest  return  of  the  money  value  of  goods 
exported  and  imported,  always  shows  an  excess  in  value  of  imports 
over  exports.  I  am  assuming,  of  course,  that  the  trade  is  exclusively 
between  country  and  country,  and  that  there  is  no  roundabout 
settlement  through  a  third  country. 

The  reason  is  obvious.  In  trade,  we  value  what  we  receive  at 
more  than  what  we  give,  or  there  would  be  no  profit.  This  is  the 
case  with  every  country.  A  Frenchman  values  EngHsh  coals  more 
than  he  does  French  wines,  and  the  Enghshman  values  French 
wines  more  than  he  does  English  coals.  If  each  did  not,  there 
w^ould  be  no  trade ;  the  Frenchman  had  better  keep  his  wine,  the 
Enghshman  his  coals.  Then  the  wine  and  the  coals  have  to  be 
carried.  If  the  Englishman  does  both  journeys,  the  value  of  the 
coals  in  France  is  more  by  the  freight,  the  value  of  wine  in  England 
also  more  by  the  freight.  In  England,  the  coal  is  valued  less  the 
ca,rriage,  and  the  wine  more  the  carriage,  and  what  may  be  a  very 
profitable  transaction  may  seem  to  those  who  do  not  understand  the 
figures  a  very  losing  transaction. 

Now  let  us  take  a  step  further.  Let  us  analyse  what  occurs  every 
day.  An  English  vessel  takes  cloth  to  Hamburgh,  carries  leather 
thence  to  Bordeaux,  and  takes  wine  to  England.  The  only  thing 
which  appears  in  the  exports  and  imports  are  the  cloth  and  the  wine. 
But  the  two  articles  bear  the  three  freights,  and,  as  far  as  they  are 
concerned,  the  imports  again  seem  ruinously  above  the  exports.  In 
the  fifteenth  century  people  understood  the  machinery  of  trade 
better  than  some  do  now,  for  they  saw  what  the  profit  was  which 
the  English  mercantile  marine  gained  by  the  carrying  trade,  and 
in  France  especially  wished  to  check  it  by  a  sharp  Navigation  Act. 
But  the  power  of  kings,  and  even  of  parliaments,  is  no  match  for 
the  instincts  of  trade. 

Under  the  ordinary  conditions  of  trade,  then,  merchants  do  not 
find  it  to  their  interest  to  further  the  designs  of  Government  in 
securing  a  treasure,  or  even  an  available  surplus  or  over-supply  of 
money.     However  honest  the  Government  is  in  the  management 

8 


98  DIPLOMACY  AND  TBADE. 

of  its  mint,  and  very  few  European  Governments  have  been  even 
decently  honest  in  this  direction,  but,  on  the  contrary,  most  flag- 
rantly dishonest,  merchants  will  not  keep  more  money  than  they 
want,  wiU  not  sell,  if  they  can  help  it,  at  a  disadvantage,  which, 
being  put  into  the  language  of  the  custom  house  returns,  will 
always  make  then:  imports  exceed  in  value  their  exports.  If  they 
do  not  do  so,  they  get  no  profits.  There  are  to  be  sure  persons 
when  prices  are  low,  and  profits  are  low,  who  play  on  the  credulity 
of  those  who  do  not  understand  the  ordinary  course  of  business, 
because  they  know  that,  if  they  could  alter  the  course  of  English 
trade,  they  would  for  a  time  get  higher  prices  and  higher  profits, 
and  pay  lower  wages,  but  the  dishonesty  of  their  purpose  is  trans- 
parent. 

The  interpretation  of  trade  is  more  difficult  still  when  in  a 
country  like  our  own,  an  enormous  and  incredible  mass  of  foreign 
and  colonial  securities  is  held  by  British  investors.  I  am  confi- 
dently assured,  by  those  who  know  the  facts  well,  that  at  least  two 
thousand  millions  sterling  of  such  securities  are  held  in  Great 
Britain,  and  ear-marked  on  the  Stock  Exchange.  We  in  Eng- 
land hold  all  or  nearly  all  the  Colonial  securities,  the  Indian  Debt, 
and  so  large  a  mass  of  foreign  debt,  that  no  large  purchase  can 
be  made  of  such  foreign  debt  on  any  but  the  London  Stock  Ex- 
change. Now  interest  must  be  paid  on  such  liabilities,  and  of 
course,  in  accordance  with  the  rule  laid  down  before,  the  ordinary 
way  in  which  such  an  amount  of  interest  is  paid,  as  is  implied  in 
the  above-stated  indebtedness,  is  by  goods,  the  amount  or  value  of 
which  makes  the  aggregate  of  imports  appear  to  be  vastly  in  excess 
of  the  aggregate  of  exports.  To  ignorant  persons  these  figures 
appear  very  alarming,  and  dishonest  persons  play  on  the  alarms  of 
the  ignorant.  In  fact,  the  annual  interest  which  the  borrowers 
contract  to  pay  is  expressed  in  the  currency  of  the  United  Kingdom, 
or  in  the  currency  of  the  borrowing  state  and  community,  and  in 
theory  such  debtors  are  bound  to  pay  in  money.  In  practice, 
however,  they  pay  in  goods,  generally  in  raw  materials,  or  in 
articles  which  our  climate  will  not  allow  to  be  produced,  or 
not  to  be  produced  in  so  useful  a  form.  Hence  a  country  like 
our  own,  to  whom  other  countries  are  largely  indebted,  always 
gets  its  raw  materials,  and  some  other  articles,  at  the  cheapest 


HOW  DOES  A  NATION  SPEND  MOBE  THAN  IT  EABNS?  99 

rates  possible,  a  great  advantage  to  capitalist,  labourer,  and 
consumer. 

There  is  one  infallible  test  by  which  we  may  discover  whether  a 
country  is  spending  more  than  it  earns.  It  begins,  as  private  in- 
dividuals do,  to  contract  debts,  and  the  proof  that  it  is  contracting 
debt  is  given  incontestably  in  the  export  of  securities.  It  may  be 
wise  to  contract  debts,  when,  for  example,  a  colony  borrows  money 
for  the  purpose  of  constructing  beneficial  railways  at  a  rate  of 
interest  lower  than  that  at  which  it  can  borrow  at  home.  It  may 
borrow  of  necessity,  as  when  a  country,  which  still  has  sufficient 
resources  to  meet  the  interest  on  its  loans,  is  constrained  by  the 
charges  of  war,  or  any  other  expenditure  on  which  the  loan  is 
wholly  destroyed  and  consumed,  to  borrow  from  its  neighbours.  It 
may  borrow  foolishly,  as  when  a  country,  not  yet  able  to  take 
advantage  of  its  natural  resources,  borrows  to  construct  railways, 
which  will  remain  so  long  unproductive  that  it  would  have  been 
better  to  have  gone  without  them.  When  it  borrows  it  exports 
securities  and  takes  goods  in  exchange.  In  theory,  the  lender  lends 
money ;  in  fact,  he  lends  manufactures,  as  rails,  carriages,  and 
similar  products.  If  the  country  which  borrows  and  takes  goods 
puts  a  tax  on  the  goods  it  takes,  it  has  to  pay  a  higher  price  for 
them  ;  if  the  country  which  receives  interest  puts  a  heavy  tax  on 
the  only  articles  in  which  the  debtor  country  can  pay,  it  may  make 
such  a  country  incapable  of  paying  at  all  Lastly,  if  a  country 
wants  to  borrow,  and  will  not  take  the  goods  of  the  lender  at  all,  it 
must  pay  the  interest  in  its  own  products,  and  at  increasingly  lower 
prices  than  it  would  have  sold  them  at  if  it  allowed  trade  to  be 
more  free.  No  doubt  the  debtor  may  repudiate,  but  that  is  fatal 
to  his  reputation  as  a  borrower,  for  they  who  can  lend  never  forgire 
a  bankrupt  state.  But  as  long  as  he  keeps  good  faith,  the  debtor 
is  at  the  mercy  of  the  creditor  who  can  always  elect  how  ho 
will  be  paid.  A  state  which  holds  many  debts  in  its  own  hands 
has  always  a  greater  command  over  international  money  than  a 
state  which  has  few  or  none,  and  moreover  is  in  debt  to  its 
neighbours. 

I  give  you  this  sketch  of  international  trade,  of  exports  and  im- 
ports, and  their  meaning,  because  some  foolish  or  dishonest  persons 
are  trying  to  turn  figures,  which  really  prove  the  existence  of  a 


100  DIPLOMACY  AND  TRADE. 

profitable  trade,  into  evidence  that  this  country  is  declining,  and 
should  reverse  its  trade  policy.  It  is  very  likely  that  such  people 
are  as  uninfluential  as  they  are  shallow.  It  is,  however,  to  the 
purpose  to  show  that  if  we  did  reverse  our  policy,  we  should  inflict 
incredible  injuries  on  ourselves,  as  manufacturers  and  consumers, 
and  should  bring  those  who  have  lent  their  money  to  foreign  coun- 
eries,  and  especially  to  our  colonies,  within  measurable  distance 
of  the  risk  of  repudiation  and  the  total  loss  of  their  property. 
People  who  try  to  keep  our  goods  out  of  their  market  no  doubt 
do  us  an  injury,  but  they  do  themselves  more.  If  we  were  to 
retaliate,  and  seek  to  exclude  those  materials  in  which  alone 
they  can  pay  their  way,  we  might  ruin  them,  we  should  cer- 
tainly damage  ourselves,  and  we  should  very  probably  give  a 
shock  to  public  credit  which  it  would  not  recover  for  a  century 
or  more. 

The  earliest  trade  of  England  was  with  the  Baltic  and  the  Low 
Countries.  For  more  than  two  centuries,  and  to  a  greater  or  less 
extent  for  three,  England  had  important  possessions  on  the  south- 
west coast  of  France,  from  which  she  exported  wine  and  salt,  the 
former  of  which  could  not  be  produced  in  England  to  any  advantage, 
and  the  latter,  at  the  time,  not  nearly  so  cheaply  and  so  well.  The 
principal  districts  with  which  England  traded  in  early  times  were 
the  towns  of  the  Hanseatic  League,  with  the  Flemish  cities  (then 
the  principal  region  of  textile  manufactures,  and  the  carriers  of 
Eastern  produce),  and  the  duchy  of  Guienne. 

The  Hanseatic  League  was  a  combination  of  free  cities  on  the 
shores  of  the  Baltic  and  the  German  Ocean,  who  associated  together 
for  the  purpose  of  defending  commerce  from  marauders.  It  is 
probable  that  to  their  efforts  Western  Europe  owes  the  extinction 
of  that  piracy  on  the  ocean,  and  those  piratical  settlements  on  land, 
which  were  the  scourge  of  Western  Europe  for  centuries.  It  appears 
that  for  a  time  at  least  the  seat  of  the  administration,  such  as  it 
was,  of  the  Hanseatic  League  was  Bergen,  in  Norway.  Their 
treasury  was  said  to  have  been '  at  Wisby,  in  the  isle  of  Gottland. 
A  branch  of  the  association  was  early  and  long  settled  in  London, 
itself  a  principal  member  of  the  League,  under  the  name  of  the 
alderman  and  merchants  of  the  Steelyard,  in  a  place  near  the  Tower. 
It  is  tc  be  regretted  that  the  history  of  the  League  has  not  been 


THE  HANSEATIC  LEAGUE.  101 

better  written.     The  works  of  Werdenhagen,  Mallet,  Schlozer,  and 
Lappenburg,  are  very  poor  productions. 

Many  charters,  thirty-five  have  been  collected,  were  granted  to 
the  Hanseatic  League  between  1235,  when  I  have  found  the  first, 
to  1567,  the  last.  In  1578  Elizabeth  abolished  the  League  as  far 
as  England  was  concerned.  Most  of  the  cities  were  overpowered 
and  absorbed  by  the  rising  monarchies  of  Northern  and  Eastern 
Europe,  and  at  last  the  League  was  represented  by  Hamburgh, 
Lubeck,  and  Bremen  only.  Their  position  as  a  trading  association 
is  most  marked  during  the  fifteenth  century,  during  which  twenty - 
one  out  of  the  charters  above  recorded  were  given.  The  character 
of  the  trade  carried  on  by  the  Hanse  towns  with  England  is,  I 
conclude,  designated  in  that  part  of  the  "  Libel  of  English  Policy  " 
which  deals  with  what  the  author  calls  the  Danske  trade.  It 
appears  that  England  was  supplied  with  furs,  cloth,  feathers,  occa- 
sionally wheat  and  rye,  iron,  tar,  glass,  wax,  and  other  products 
of  a  similar  character.  There  was  a  time  in  which  it  seems  that 
even  the  produce  of  the  farthest  East  was  conveyed  by  land  car- 
riage across  Asia,  through  the  Baltic  towns ;  and  that  fragments  of 
ancient  porcelain  found  occasionally  in  the  extreme  West,  are  relics 
of  trade  which  is  now  entirely  extinct  and  forgotten. 

The  trade  with  the  Flemings  began  early  and  was  of  the  highest 
importance  to  England  and  the  Low  Countries  till  Flanders  was 
ruined  by  the  Spanish  war  and  the  Spanish  Inquisition.  The 
Flemish  cities  grew  wealthy  from  the  woollen  and  linen  trade,  fit'om 
the  former  especially,  the  whole  raw  material  of  which  came  from 
England.  Hence  friendly  relations  with  England  were  of  the 
highest  importance  to  Flanders,  and  the  English  monarchs,  while 
they  engaged  in  their  attempt  to  conquer  France  for  thePlantagenets, 
saw  the  necessity  of  haviug  Flanders  or  its  rulers  as  their  ally. 
This  fact  explains  the  friendship  of  Edward  III.  with  Arteveldt,  of 
the  alliance  of  Henry  V.  with  the  Duke  of  Burgundy,  who  had  now, 
by  marriages  aDd  usurpations,  obtained  nearly  the  whole  of  the 
Low  Countries,  the  Yorkist  alliance  with  Charles  the  Bold,  and  the 
Intercursus  Magnus  of  Henry  VII.  The  inheritance  of  the 
house  of  Burgundy  has  made  what  we  now  call  Belgium  the 
battle-ground  of  Western  Europe,  from  the  days  of  Philip  the 
Second  to  those  of  the   Continental  war.      Its  commercial  sig- 


102  DIPLOMACY  AND  TBADE. 

nificance  has  passed  away,  its  political  importance  is  still  great, 
and  it  is  believed  to  be  in  no  small  degree  the  key  to  the  Western 
situation. 

The  woollen  produce  of  Flanders,  with  the  various  kinds  of  silk- 
workers  and  linen  manufacturers,  were  the  occupation  of  most  of  its 
towns.  It  was  so  densely  peopled,  that,  like  Holland  a  century  later, 
it  was  unable  to  support  its  own  people  from  the  produce  of  its  soil, 
and  imported  large  quantities  of  wheat  and  barley,  the  latter  notably 
from  the  eastern  counties  of  England.  It  was  the  mart  of  Eastern 
produce,  which  came  to  it  by  a  route  which  I  shall  presently 
describe.  Spices  and  foreign  fruits  were  articles  greatly  in  demand, 
and  were  purchased  chiefly  at  Bruges.  We  shall  see  hereafter  how 
this  part  of  the  Flemish  trade  was  effectually  destroyed.  In 
Flanders,  too,  and  especially  in  Antwerp,  was  carried  on  an  active 
trade  in  bills  of  exchange,  those  instruments  of  credit  by  which,  as 
was  alleged,  the  wealth  of  England  was  poured  by  a  thousand 
channels  into  the  Papal  treasury,  and  England  was  impoverished 
by  spiritual  tributes.  During  the  whole  of  this  period  there  were 
bickerings  and  occasional  disputes,  for  the  Flemings  were  turbulent 
by  nature  and  by  reason  of  their  municipal  privileges,  and  the  rulers 
of  England  and  Flanders  frequently  sacrificed  commercial  benefits 
to  political  jealousies  and  interests.  As  I  have  said,  the  trade 
between  England  and  Guienne  and  its  port  of  Bordeaux  was  chiefly 
in  wine  and  salt,  and  these  two  articles  were  abundant  and  cheap  as 
long  as  the  political  connection  between  England  and  Guienne  lasted. 
As  is  well  known,  in  1450,  France  had  recovered  the  whole  of  her  sea- 
board from  the  English.  It  appears  that  the  French  king  tried  to  in- 
troduce his  fiscal  system  among  the  Gascons  ;  it  is  known  that  they 
rebelled,  that  they  were  succoured  by  the  English  under  Talbot, 
Earl  of  Shrewsbury,  and  that  the  Earl  and  his  son  were  defeated 
and  slain  at  the  battle  of  Chatillon.  With  this  victory,  all  the 
ancient  possessions  of  the  Plantagenet  kings  except  Calais  were  lost. 
But  long  after  all  idea  of  attempting  their  recovery  was  given  up,  it 
was  a  common  practice  for  the  English  sovereigns  to  stipulate  for  the 
free  export  of  wine  and  salt  from  France. 

The  Baltic,  the  Flemish  towns,  and  the  French  seaboard  were 
the  limits  of  English  maritime  enterprise  up  to  near  the  end  of  the 
fifteenth  century.     But  towards  the  close  of  this  period  the  Spanish 


TBADE  WITH  FL-ANDERS  AND  ELSEWHERE.        103 

kings  of  Aragon  and  Castile,  now  united,  had  achieved  the  conquest 
of  all  the  Moorish  Principalities  in  the  South.  Hence  the  English 
passed  along  the  Portuguese  and  Spanish  coast,  and  traded  as  far 
as  the  quay  of  Seville.  They  do  not  appear  for  some  time  to  have 
entered  the  Mediterranean,  still  less  to  have  ventured  on  exploring 
the  regions  which  Henry  of  Portugal  had  visited.  Hence  there  was 
some  colour  for  the  Bull  of  Borgia,  under  which  all  the  world  to  the 
west  of  the  Atlantic  was  bestowed  upon  Spain,  all  the  east  on 
Portugal.  But  the  English  penetrated  to  the  north.  The  fishing 
grounds  near  Iceland  had  long  been  visited  by  the  Yorkshire  navi- 
gators. In  the  fifteenth  century  the  Bristol  merchants,  trusting 
to  the  mariner's  compass,  reached  the  same  goal  through  the 
Hebrides. 

An  Act  of  32  Henry  VHI.  cap.  14,  reciting  an  earlier  Act  of  his 
father,  attempts  to  regulate  the  trade  of  England  with  those  parts 
of  Europe  where  England  had  commercial  relations.  Even  in  early 
times  its  position  was  good.  A  debate  between  two  heralds-at-arms, 
written  in  the  fifteenth  century  and  published  lately  by  a  French 
antiquarian  society,  confesses,  on  the  part  of  the  French  patriot,  that 
the  mercantile  marine  of  England  was  large  and  active,  and  allows 
that  England  has  a  great  geographical  position  for  trade  with  the 
Baltic  provinces  and  South-western  Europe,  but  charges  the 
English  with  piracy  on  French,  Spanish,  Danish,  and  Scottish 
vessels,  asserts  that  they  wish  to  appropriate  the  trade  of  the  world, 
dwells  on  the  supreme  importance  of  French  products  to  Enghsh 
trade  and  consumption,  and  threatens  the  culprits  with  the  penalties 
and  police  of  a  stringent  Navigation  Act.  From  internal  evidence, 
it  is  plain  that  this  treatise  must  have  been  written  after  the  capture 
of  Bordeaux  in  1453,  and  before  the  death  of  Charles  VI.  in  1461 
The  admission  as  to  the  character  of  the  English  mercantile  marine 
is,  to  my  judgment,  more  trustworthy  than  the  stories  which  are 
told  about  the  maritime  decay  of  England  in  the  fifteenth  century, 
and  the  gibes  of  the  Flemings  on  the  downfall  of  English  supremacy 
on  the  seas. 

The  English  attempted  to  reach  Eussia  from  the  north,  indeed, 
at  that  time,  the  sixteenth  century,  Russia  had  no  accessible 
European  port.  One  of  the  ships  reached  what  was  afterwards 
called  Archangel  in  1555,  and  the  embassy  had  an  interview  vith 


104  DIPLOMACY  AND  TBADE, 

Ivan  the  Terrible — 1533-1584.  It  seemed  tliat  prosperous  trade 
would  be  developed  between  Astracban  and  Archangel.  But  after 
the  death  of  Ivan,  and  the  disturbed  reign  of  his  successor,  came 
a  period  of  confusion  and  revolution,  and  the  enterprise  of  the 
English  adventurers  was  arrested.  It  was  not  till  after  the  middle 
of  the  sixteenth  century  that  English  vessels  entered  the  Mediter- 
ranean. Even  then  for  a  long  time  the  trade  was  capricious  and 
disappointing.  The  Turk  could  destroy,  but  could  not  renew,  stiU 
less  create  a  trade.  He  has  turned  the  fairest  part  of  the  earth's 
surface  into  a  howling  wilderness,  and  as  long  as  he  is  permitted 
to  exist,  there  is  no  hope  of  renovation.  It  is  upon  his  exploits  that 
the  history  of  Central  and  Western  Europe  turns,  that  the  old 
centres  of  trade  were  abandoned,  or  fell  into  decay,  and  that  a 
new  course  was  discovered  in  which  the  energy  of  the  Western 
nations  could  enter. 

The  first  definite  or  accurate  information  which  we  get  as  to  the 
course  of  trade  from  the  east  to  the  west,  is  in  the  work  of  Sanuto 
the  Venetian,  in  an  address  or  remonstrance  laid  before  one  of  the 
Avignon  Popes,  John  XXI.,  in  1 321,  and  pubHshed  in  a  collection 
entitled  Secreta  Fidelium  Crucis.  How  Sanuto  can  have  imagined 
that  any  interest  beyond  his  own  would  have  been  entertained  by 
this  most  rapacious  and  sordid  of  the  French  Popes  we  are  not  told, 
but  probably  Pope  John  was  to  him  only  a  channel  through  which 
he  could  advertise  to  the  mercantile  world  what  were  the  perils  to 
which,  in  his  opinion,  the  traffic  to  the  East  was  nearing.  Con- 
certed action  in  Western  Europe  was  hopeless.  The  experience  of 
the  Crusades  had  proved  how  frail  a  bond  enthusiasm  was,  and  the 
failure  of  Louis  IX.  might  have  assured  the  most  sanguine  of  men, 
one  would  have  thought,  that  the  day  was  past  in  which  armed 
intervention  would  revive  foreign  trade. 

According  to  this  author,  the  ancient  depot  of  Eastern,  i.e.,  of 
Indian  produce  was  Bagdad,  and  it  would  seem  that  this  view  was 
confirmed  by  the  evidence  given  in  the  writings  of  early  travellers, 
and  of  romances,  as  long  as  Bagdad  was  under  the  rule  of  the 
Abassid  Caliphs,  and  was  practically  the  centre  of  Islam.  But  in 
course  of  time,  Central  Asia  was  overrun  by  divers  barbarian  hordes, 
and  the  routes  of  the  caravans  were  interrupted.  Two  of  these  are 
known  to  Sanuto  by  memory.     The  one  passed  from  Bagdad  over 


B0UTE8  FBOM  THE  EAST.  105 

the  plains  of  Mesopotamia  and  Syria  to  Licia,  the  ancient  Seleucia, 
and  the  produce  by  this  land  route  was  purchased  and  distributed 
by  the  principal  maritime  cities  of  Italy — Venice,  Genoa,  Pisa,  and 
Florence.  It  appears  that  this,  the  earliest  and  shortest  route,  was 
early  attacked  by  the  savages  who  crowded  down  into  Central  Asia 
from  the  Great  Plateau,  which  lies  between  the  eastern  side  of  the 
Caspian  and  the  Chinese  Empire,  irruptions  of  whom  destroyed  what 
remained  of  the  ancient  civihzation  in  the  great  plains,  and  made  all 
transit  too  dangerous  to  be  possible.  A  second  caravan  route,  also 
starting  from  Bagdad,  followed  the  Tigris  to  its  sources  in  Armenia 
and  Azerbijan,  and  going  along  the  road  which  had  been  explored 
for  the  first  time  in  history  by  the  memorable  Ten  Thousand, 
reached  the  same  point  which  they  did  at  Trebizond  or  Trepezus. 
This  was  the  more  difficult,  but  the  safer  route,  though  perilous 
enough,  and  traversed  conveniently  only  during  the  summer.  But 
this  route  had  also  been  interrupted,  though  while  it  lasted  it  was 
welcome  to  the  Italian  cities,  and  especially  to  Venice,  who  had 
several  factories  in  the  Black  Sea. 

Now  Sanuto  tells  us  that  Eastern  produce  was  collected  at  two 
ports  in  the  great  peninsula  of  its  origin,  which  he  calls  Mahabar 
and  Cambeth,  and  thence  had  generally  been  shipped  to  certain 
ports  on  the  Persian  Gulf  and  the  river,  the  Tigris.  A  smaller 
portion  was  sent  to  Aden,  for  transit  through  Egypt.  In  conse- 
quence of  the  circumstances  referred  to  above,  Aden  had  become  the 
only  port,  and  the  Egyptian  the  only  route.  From  Aden  he  says 
there  was  a  nine  days'  journey  across  the  desert  to  Chus,  as  he  calls 
it,  on  the  Nile.  Thence  it  went  by  the  river  for  fifteen  days  to 
Babylon,  a  name  which  the  mediaeval  writers  gave  to  Cairo.  From 
Cairo  it  went  by  canal  to  Alexandria,  whence  it  was  shipped  to 
Europe,  after  being  taxed  up  to  a  third  of  its  value  by  the  Sultan. 
The  cost  of  the  articles  was  greatly  enhanced,  and  the  quality  greatly 
deteriorated  by  this  mingled  sea  and  land  passage,  and  by  frequent 
transhipments.  Even  under  existing  circumstances,  some  persons 
braved  the  perils  of  the  old  routes,  and  brought  small  parcels  of 
these  precious  goods  by  the  Asiatic  road  to  the  Mediterranean.  If 
they  escaped  robbers  their  gain  was  great,  for  the  articles  were 
always  in  much  better  condition. 

The   spices   of  the   East  were   exchanged    at    Alexandria    for 


106  DIPLOMACY  AND  TBADE. 

European  produce.  The  articles  most  in  demand  were  the  metals, 
among  which  Sanuto  enumerates  quicksilver,  wood  and  pitch,  coral 
and  amber,  and  the  shrewd  Venetian  gives  the  taxes  levied  on  imports, 
6f  per  cent,  on  gold,  4^  to  3|^  on  silver,  and  from  25  to  20  on  other 
metals  and  other  products.  Egypt  was  not  a  country  of  varied 
products.  It  depended  entirely  on  foreign  countries  for  metals, 
for  timber,  and  many  familiar  conveniences  of  life.  The  writer, 
therefore,  concludes  that  if  all  commercial  intercourse  with  Egypt 
were  forbidden,  and  a  sufficiently  large  navy  could  be  collected  in 
order  to  meet  the  possible  effects  of  the  Sultan's  resentment,  that 
potentate  would  be  obliged  to  revise  his  tariff,  and  the  old  routes 
from  Bagdad  to  Licia  and  Antioch  might  be  revived. 

The  remonstrances  of  Sanuto  were  ineffectual,  and  the  trade  with 
the  East  was  carried  by  the  Egyptian  route  only.  But  it  is  clear 
from  the  fall  in  prices  during  the  fifteenth  century,  that  the  Sultan 
must  have  seen  that  it  was  wise  not  to  press  too  grievously  on  the 
trade  which  was  so  important  to  his  dominions.  Pepper,  the  most 
important  and  familiar  of  these  Eastern  condiments,  was  generally 
procurable  at  a  low  price  during  this  century,  and  a  local  manu- 
facture of  sugar  at  Alexandria  made  this  article  so  cheap,  that  at 
the  beginning  of  the  sixteenth  century  it  was  little  more  than  an 
eighth  of  the  price  at  which  it  stood  at  the  beginning  of  the 
fifteenth. 

Now  stories  as  to  the  occupation  of  a  wide  and  fertile  region  in  the 
Ear  West,  curious  and  novel  products  of  which  were  cast  by  the 
great  ocean  wave,  which  we  now  know  as  the  Gulf  Stream,  on  the 
western  coasts  of  the  country,  were  rife.  The  voyages  and  discoveries 
of  Henry  of  Portugal,  more  than  a  generation  before,  fired  the 
imagination  of  mariners,  and  one  of  them,  who  was  convinced  that 
there  was  a  western  passage  to  the  Indies,  importuned  every  Court 
in  Europe  to  supply  him  with  the  means  of  discovery.  Unsuccessful 
with  one  after  another,  Columbus  found  a  patron  in  Isabella  of 
Castile,  and  discovered  the  New  World  in  1492.  The  Portuguese 
monarch  was  not  much  behind  the  Queen  of  Castile.  In  1497,  Vasco 
di  Gama  doubled  the  Cape,  and  the  waterway  to  India  was  made  out* 
In  1496  occurred  the  voyage  of  Sebastian  Cabot  from  Bristol,  and 
the  discovery  of  Newfoundland.  But  for  many  a  long  day  England 
left  the  field  of  enterprise  to  the  Spaniard  and  the  Portuguese.   The 


THE  DISCOVEBY  OF  THE  NEW  WOBLD,  ETC.        107 

first  Tudor  king  was  too  thrifty,  the  second  too  lavish  for  any  real 
enterprise,  and  when  the  second  was  dead  there  was  nothing  left  for 
a  time  on  which  enterprise  could  be  founded. 

The  discoveries  of  Spain  and  Portugal  were  not  undertaken  a  day 
too  soon.  At  the  beginning  of  the  sixteenth  century  Selim,  the 
most  able  and  the  most  savage  of  the  Turkish  Sultans,  overran 
Mesopotamia,  got  possession  of  the  holy  places,  with  the  title  of 
Caliph  for  his  family  and  descendants,  and  in  1516  conquered  Egypt 
at  the  battle  of  the  Pyramids.  Selim  was  the  incarnation  of  all 
Turkish  energy  at  its  best,  and  all  Turkish  vices  at  their  worst.  The 
trade  of  Alexandria  was  destroyed,  the  route  with  the  east  broken, 
and  the  protracted  impoverishment  of  the  Nile  valley  commenced, 
an  impoverishment  which  will  never  cease  until  the  Turk  is  expelled 
from  Egypt.  The  produce  of  the  East,  not  yet  procured  in  sufficient 
plenty  by  the  long  sea  voyage,  rose  to  famine  prices,  the  Italian, 
the  South  German,  and  the  Rhenish  cities  were  impoverished,  and 
for  a  long  time  the  Flemish  marts  were  deserted. 

During  the  sixteenth  century  Spain  was  conquering  kingdoms 
and  collecting  treasure  in  the  New  World,  kingdoms  to  be  depopulated 
and  degraded  as  the  Turk  had  done  by  the  Old  World,  where  he  set 
his  foot,  treasures  to  be  rapidly  wasted  in  impossible  projects. 
Portugal  was  engaged  in  planting  factories,  in  extending  its  influence 
over  some  of  the  Spice  Islands,  and  in  conquering  others,  both 
nations  acting  under  the  authority  of  Borgia's  Bull.  In  course  of 
time  England  and  Northern  Europe  generally  revolted  from  the  Pope, 
and  the  wars  of  reHgion  began,  and  lasted  near  a  century,  from  the 
revolt  of  the  Netherlands  to  the  peace  of  Westphalia.  Slowly,  and 
as  soon  as  they  felt  strong  enough  for  the  enterprise,  these  northern 
people  began  to  doubt  the  authority  of  Borgia's  BuU. 

If  we  call  men  by  their  proper  names,  Drake  and  his  associates  in 
enterprise  or  discovery  were  pirates,  constantly  and  avowedly 
engaged  in  plundering  the  trade  of  a  monarch  with  whom  England 
was  nominally  at  peace,  but  greatly  at  variance.  I  do  not  doubt  the 
ultimate  usefulness  of  Drake's  career,  but  for  a  long  time  English 
rovers  had  a  very  bad  reputation,  and  were  actually  of  the  character 
which  the  French  herald-at-arms  ascribed  to  the  whole  English 
nation  more  than  a  century  before.  The  usefulness  consisted  perhaps 
in  encouragement  to  EngUsh  enterprise,  and  the  proof  of  EngHsh 


108  DIPLOMACY  AND  TBADE. 

courage.  It  was  probably  of  great  military  value  and  significance 
in  the  coming  struggle  with  Spain,  but  the  candid  inquirer  into  men 
and  acts  is  constrained  to  set  down  the  exploits  of  Drake  in  the 
same  class  of  transactions  with  those  for  which  Captain  Kidd  and 
his  comrades  were  hanged  at  Execution  Dock,  little  more  than  a 
century  after  the  naval  hero  of  the  Plymouth  Hoe  ended  his 
career. 

The  charter  of  the  East  India  Company  was  granted  on  the  last 
day  of  the  sixteenth  century,  December  31,  1600.  The  principal 
person  among  the  new  adventurers  was  Clifford,  Earl  of  Cumber- 
land, an  old  buccaneer,  which  was  iot  a  time  the  polite  equivalent 
of  a  pirate.  The  practice  of  buccaneeriag,  especially  among  the 
Spanish  possessions  m  the  New  World,  was  long  a  favourite  field  of 
energy.  Paterson,  the  reputed  founder  of  the  Bank  of  England, 
is  sometimes  said  to  have  been  a  missionary  in  the  Antilles,  some- 
times described  as  a  pirate,  and  it  has  been  suggested  that  he  was 
probably  both  by  turns.  Long  after  Paterson,  an  English  clergy- 
man, who  rose  to  be  Archbishop  of  York,  is  said  to  have  pursued 
the  lucrative  and  invigorating  calling  of  a  buccaneer  in  his  earlier 
days.  So  it  was  said  of  Archbi^op  Blackburn  in  his  lifetime,  and 
I  never  heard  that  this  dignified  prelate  resented,  much  less  refuted, 
this  charge  against  him.  The  East  India  trade  was  tainted  in 
its  beginnings  by  the  vices  of  those  who  followed  it,  and  not  a  little 
of  the  trouble  which  the  commerce  of  England  incurred  in  the  East, 
quarrels  with  the  Dutch,  high-handed  proceedings  at  Amboyna,  and 
the  like,  is  to  be  explained  by  the  lawless  and  piratical  character  of 
those  who  founded  British  commerce  in  the  Eastern  seas,  and  began 
the  Eastern  Empire. 

The  Dutch  East  India  Company  was  founded  in  1603,  with  a 
capital  at  least  eight  times  as  large  as  that  of  its  English  rival. 
Soon  indeed  the  objects  of  the  English  company  became  different 
from  those  of  the  Dutch.  The  English  strove  to  establish  themselves 
on  those  parts  of  Hindostan  which  were  not  occupied  by  the  Portu- 
guese, from  1580  to  1640.  Subjects  of  the  Spanish  crown,  the 
Dutch  sought  to  secure  a  monopoly  of  the  spice  islands,  and  par- 
ticularly of  those  where  the  clove  grew.  Now  such  a  policy  included 
a  good  deal  of  costly  fighting,  and  the  Dutch  merchant  vessels  were 
as  much  men-of-war  as  traders.     There  have  been  few  objects  on 


INHERENT  EBEOBS  IN  THE  DUTCH  TRADE,  109 

which  more  blood  has  been  shed  than  on  the  exclusive  right  to  sell 
cloves.  Two  centuries  and  a  half  ago  they  were  the  most  valued  of 
spices,  and  according  to  the  notions  which  people  then  had  of  trade, 
the  action  of  the  Dutch  was  thought  to  be  consummately  prudent 
and  patriotic,  though  very  irritating  to  other  nations.  But  the 
objects  of  the  Dutch  in  achieving  their  cardinal  policy,  to  procure  a 
monopoly  of  produce  in  the  East,  and  a  monopoly  of  markets  in  the 
West,  loaded  the  Dutch  East  India  Company  with  debt,  and  brought 
down  in  the  ruin  of  that  great  trading  corporation,  another  trading 
corporation,  the  great  Bank  of  Amsterdam,  which  had  been  for 
more  than  a  century  and  a  haK  the  commercial  centre  of  the  civilized 
world.  The  exposition  of  the  situation  and  the  exposure  of  the  error 
are  so  easy,  and  the  lesson  drawn  is  so  striking,  that  I  am  bound  to 
explain  it. 

The  object  of  a  prudent  trader  is  to  keep  prices  up  to  profits,  i.^., 
to  sell  at  such  an  advantage  as  will  give  him  on  his  transactions  the 
profit  which  he  anticipated  when  he  made  his  purchase  or  manu- 
factured his  goods.  But  the  object  of  the  prudent  trader  is  likewise 
to  enlarge  his  market,  to  increase  the  area  or  number  of  his  customers, 
and  to  efl'ect  this  he  will  sacrifice  a  portion  of  his  possible  profits, 
for  he  knows  that  if  business  is  procured  it  is  apt  to  prove  permanent, 
and  that  it  is  better  to  have  fifty  transactions  at  5  per  cent,  within 
the  same  time  than  to  have  five  at  10,  since  the  proportion  between 
the  two  is  as  250  to  50.  In  the  competition  of  traders  this  practice 
is  what  modem  experience  has  inculcated.  But  when  the  producer 
neglects  to  increase  the  number  of  his  customers,  and  increases  the 
expenses  of  production,  he  is  on  the  road  to  ruin,  and  may  be  so 
without  knowing  it. 

Now  this  last  policy  was  that  of  the  Dutch.  They  kept  up  prices 
and  so  limited  consumption.  They  strained  every  nerve,  exhausted 
their  credit  in  the  effort  to  keep  by  main  force  other  traders  out  of 
the  field,  experience  proving  that  the  only  way  in  which  one  can 
check  competition  is  by  lowering  prices.  In  the  expectation  of  get- 
ting one  large  profit  on  each  transaction  they  succeeded  in  making 
a  small  profit  or  even  a  loss  on  their  whole  transactions  put  together, 
for  it  cost  more  to  protect  a  designedly  narrow  trade  than  it  would 
to  establish  and  render  permanent  an  intentionally  wide  one.  In 
brief,  they  narrowed  their  market  and  so  narrowed  their  profits. 


110  DIPLOMACY  AND  TBADE. 

The  folly  of  the  Dutch  is  the  folly  of  many  a  tradesman,  who,  in 
order  to  get  rapid  profits  out  of  high  prices,  discourages  custom. 

The  late  Mr.  MacCulloch,  whose  opinions  on  economical  subjects 
were  never  of  much  consequence,  and  are  now  of  none,  hazarded  an 
opinion  which  could  have  easily  been  refuted  from  the  figures  which 
he  used  to  collect  and  pretended  to  handle.  It  was  that  the  low  rate 
of  interest  in  Holland  was  due  to  the  heavy  taxation  of  the  country. 
But  if  taxes  diminish  the  amount  of  loanable  capital  they  cause  the 
rate  of  interest  to  rise.  If  they  stimulate  in  their  expenditure  new 
kinds  of  industry,  they  raise  the  interest  on  advances  in  other  kinds 
of  industry.  Nothing  is  more  familiar  than  the  depression  of 
existing  stocks,  in  other  words,  the  exaltation  of  the  rate  of  interest, 
when  new  loans  of  large  amount  are  brought  out.  That  which 
lowers  the  rate  of  interest  is  the  accumulation  of  savings  at  a  faster 
rate  than  the  opportunities  of  investment  present  themselves.  Now 
this  was  precisely  what  happened  in  Holland.  The  Dutch  were  a 
very  saving  people,  who  deliberately,  but  through  ignorance  of  the 
true  principles  of  trade,  narrowed  the  opportunity  for  the  invest- 
ment of  Dutch  capital.  Hence  the  rate  of  interest  in  Holland  sank 
to  2  per  cent.,  and  this  at  a  time  when  the  East  India  Company 
was  borrowing  desperately  from  the  Bank  of  Amsterdam.  I  do  not 
say  that  English  merchants  were  wiser  than  Dutch  traders  were, 
but  ihey  did  not  get  the  opportunity  for  such  extravagant  blundering. 
"What  they  would  have  done  if  they  had  got  the  Dutch  monopoly  it 
is  idle  to  forecast. 

There  was  no  great  struggle  between  England  and  Holland  in 
India,  though  the  two  peoples  have  fought  there.  There  was 
between  England  and  France  during  the  Seven  Years'  War,  the  most 
disastrous  struggle  m  which  France  was  ever  engaged,  according  to 
the  opinions  then  entertained.  For  all  the  wars  in  Europe,  from 
the  peace  of  Utrecht  to  the  outbreak  of  the  great  Continental  war, 
were  waged  on  behalf  of  monopolies  of  commerce,  or,  to  be  more 
accurate,  monopolies  of  market,  for  success  meant  the  exclusion  of 
the  beaten  nation  from  the  markets  now  secured  by  the  victorious 
rival.  At  the  end  of  the  Seven  Years'  War  France  was  stripped  of 
nearly  every  colony  she  possessed.  At  the  beginning  of  it  she  was 
the  rival  of  England  in  North  America  and  in  India.  At  the  end  of 
it  she  had  scarce  a  foothold  in  either.    In  less  than  twenty  years 


THE  INTEBCUBSUS  MAGNUS.  Ill 

after  the  Seven  Years'  War  was  over,  England  had  lost  her  most 
important  colonies,  and  people  thought  that  her  place  among  nations 
was  gone.  In  the  end  the  loss  proved  to  her  how  miwise  it  is  to 
make  war  in  order  to  secure  a  monopoly  of  markets. 

The  Intercursus  Magnus  of  1496  is  the  first,  and,  on  the  whole,  the 
most  instructive  type  of  these  numerous  commercial  treaties  which 
have  been  negotiated  from  that  to  recent  times.  Henry  VII.  had  a 
political  motive  in  it  to  check  Yorkist  intrigues  in  the  Low  Countries. 
He  was  shrewd  enough  to  know  that  when  you  make  it  the  interest 
of  a  nation  to  discourage  foreign  adventurers,  who  seek  to  make 
their  asylum  the  home  in  which  to  hatch  plots,  you  are  more 
secure  from  such  people  than  you  would  be  if  you  disregarded  such 
interests.  The  first  clause  of  this  famous  treaty  conceded  free  trade, 
provided  a  license  or  passport  was  produced ;  the  second  allowed 
ships  to  be  armed  though  engaged  in  trade;  the  third  allowed  a  free 
fishery  in  waters  claimed  by  the  Enghsh.  By  the  fourth  clause  no 
pirate  or  privateer  was  allowed  access  to  the  harbours  of  either 
nation  ;  and  by  the  fifth,  refuge  from  storm  or  war  was  permitted 
to  merchant  vessels.  By  the  sixth  enemies'  goods  were  prohibited 
access  ;  and  by  the  seventh  the  law  of  wreck  was  greatly  improved. 
By  the  eighth  Flemish  merchants  were  permitted  to  reside  in  Eng- 
lish, Enghsh  in  Flemish  towns;  and  provision  is  made  that  the  levy 
of  customs  should  be  made  without  damage  to  the  goods  hable. 
There  was  to  be  no  compulsory  sale  of  goods,  and  security  might 
be  given  for  debt  by  the  tenth  and  eleventh  clauses.  By  the  twelfth 
the  barbarous  custom  of  reprisals  is  abandoned,  and  legal  process 
substituted  for  it,  with,  of  course,  the  assurance  that  the  decisions 
would  be  respected.  And,  lastly,  the  trade  in  foreign  buUion  was 
declared  free. 

The  hberahty  and  wisdom  of  these  agreements,  many  of  them 
anticipating  by  nearly  four  centuries  what  civilized  nations  have 
professed  to  agree  on  as  rules  for  future  practice,  are  sufficiently 
surprising.  They  lasted  unfortunately  no  longer  than  the  agree- 
ment was  itself  of  importance  to  the  contracting  parties.  In  less 
than  a  century  the  granddaughter  of  Henry,  and  the  great  grand- 
son of  Maximihan  were  to  be  in  bitterest  feud,  and  every  one  of 
these  principles  was  cast  to  the  winds.  But  the  Intercursus  was  a 
monument  and  a  protest ,  a  monument  of  monetary  wisdom,  and 


112  DIPLOMACY  AND  TRADE. 

a  protest  against  the  infinite  barbarism  with  which  the  wars  of 
rehgion  threatened  the  world.  It  deserves  the  praise  which  the 
more  enhghtened  men  of  that  and  succeeding  ages  bestowed 
on  it. 

I  have  mentioned  more  than  once  that  the  wars  of  the  eighteenth 
century  were  mainly  wars  for  the  monopoly  of  markets.  The 
treaties  partook  of  the  same  nature,  and  the  most  significant  and 
typical  of  them  is  the  Methuen  treaty,  negotiated  in  1708,  between 
England  and  Portugal.  In  the  great  war  of  the  Spanish  succession, 
it  was  of  importance  to  the  alhes  to  get  the  accession  of  Portugal, 
and  there  were  reasons  why  the  Kings  of  Portugal  should  take  that 
side.  In  the  first  place,  the  dynasty  was  only  sixty  years  old,  and 
the  result  of  a  successful  revolt  from  Spain  on  behalf  of  a  pretender 
of  doubtful  legitimacy.  We  may  be  certain  that  the  hereditary 
rights  of  the  crown  of  Spain  were  not  forgotten.  In  the  next,  it  gave 
the  guarantee  of  the  allied  powers  to  the  Portuguese  succession. 
In  the  next,  it  secured  the  Portuguese  East  Indies  from  Dutch 
aggression,  possibly  from  Dutch  intrigues,  for  Holland  was  profoundly 
interested  in  the  war  of  the. Spanish  succession,  since  it  involved  the 
Dutch  frontier.  Now  it  was  possible  to  found  a  treaty  on  the  basis 
of  reciprocal  monopoly  markets.  England  was  to  exclude  French 
wine,  and  take  Portuguese.  Portugal  was  to  give  a  free  market  to 
English  woollens.  But  the  discontent  of  those  who  had  to  give  up 
claret  and  take  to  port  found  loud  expression.  It  seems  that  the 
English  Government  imagmed  that  by  prohibiting  French  imports 
they  would  cripple  French  resources.  So  hereafter  French  wine 
was  not  found  in  the  books  of  the  customs.  But  in  some  way  or 
other,  it  got  to  the  cellars  of  the  consumers.  I  would  not  decry 
patriotism,  but  I  am  convinced  that  it  is  not  always  superior  to 
opportunities,  especially  when  the  opportunity  is  very  obvious,  and 
the  patriotism  is  expensive  and  distasteful.  The  Methuen  treaty 
remained  a  type  of  commercial  diplomacy  up  to  nearly  the  end  of 
the  eighteenth  century. 

After  the  close  of  the  American  War,  a  new  form  of  commercial 
treaty  was  set  on  foot,  that  of  reciprocal  customs,  and  a  clause  under 
which  the  contracting  parties  were  included  under  the  most  favoured 
nation  advantages.  Such  a  treaty  was  that  negotiated  by  Mr.  Eden 
between  Great  Britain  and  France  in  1786.     It  was,  to  be  sure,  to 


METHVEh'S,  EDEN'S,  AND  COBDENS  TREATIES.    118 

be  of  short  duration,  for  its  life  was  even  briefer  than  that  of  the 
Intercursus  Magnus  near  three  centuries  before.  But  it  was  eagerly 
accepted,  and  the  fashion  spread.  A  treaty  of  the  same  kind  was 
set  on  foot  between  France  and  Russia,  and  soon  afterwards  between 
the  United  States  and  Prussia.  In  a  short  time  Europe  would  have 
been  armed  with  a  network  of  treaties,  and  these,  so  fondly  do 
people  beheve  in  the  spread  of  humanity  and  civilization  among 
statesmen  and  kings,  were  supposed  to  be  a  guarantee  of  inter- 
national peace.  But  within  eight  years  after  Mr.  Eden's  labours, 
the  French  Revolution  had  broken  forth.  France  precipitated 
herself  on  astonished  and  unprepared  Europe,  and  statesmen  and 
kings  were  tumbling  about  altogether. 

The  treaty  of  1786  was  tl»3  model  of  the  treaty  negotiated  between 
France  and  Great  Britain  in  1861.  This  was  carried  out  by  my 
friend  Mr.  Cobden.  Himself  an  advocate  of  free  trade  in  its  broadest 
sense,  as  the  true  economical  interest  of  nations,  and  being  entirely 
and  most  lucidly  in  the  right  in  his  convictions,  he  was  not  un- 
willing to  accept  a  part  of  what  he  would  have  gladly  claimed  in 
its  entirety.  Nor  was  he  discouraged  by  his  natural  distrust  of  the 
very  singular  person  who  went  by  the  name  of  Napoleon  III.  He 
told  me  that  he  should  have  been,  had  he  been  a  Frenchman,  in 
constant  opposition  to  that  man's  government.  But  he  saw  no 
reason  why  he  should  not,  being  an  Enghshman,  avail  himself  of 
an  authority  which,  as  he  believed,  would  do  good  to  English  and 
French  trade,  and  assist  English  and  French  amity.  Some  persons, 
being  doctrmaire  free  traders,  objected  to  the  negotiation  of  half 
truths.  But  until,  all  men  being  wise,  every  man  sees  how  hollow 
and  unsatisfactory  political  and  social  compromises  are,  compromises 
must  be  made.  The  sphere  of  the  speculative  economist  is  one 
which  the  practical  man  might  envy,  were  not  the  practical  man 
constrained  to  act.  Men  who  have  hved  for  years,  as  he  lived,  as  I 
have  hved,  in  an  atmosphere  of  compromises,  learn  that  such  a  neces- 
sity is  rarely  logically,  perhaps  rarely  morally,  justifiable.  It  seldom 
occurs  to  any  one,  even  in  a  long  public  life,  to  assist  in  a  final 
change,  one  from  which  there  can  be  no  progress,  and  can  be  no 
retrogression.  I  cannot  say  that  the  treaty  of  1861  was  the  best 
arrangement  conceivable,  but  I  am  convinced  that  it  was  the  best 
arrangement  possible.     And  though  nine  years  afterwards  came  the 

9 


114  DIPLOMACY  AND  TBADE. 

furious  storm  which  swept  the  French  emperor  from  the  place  which 
he  had  so  grossly  abused,  I  am  sure  that  the  treaty  of  1861  had 
its  place  in  lightening  the  enormous  calamities  which  overtook 
France,  calamities  to  which  a  less  elastic  nation  might  have  suc- 
cumbed, in  which  a  less  hopeful  nation  might  have  despaired. 


VI. 

THE  CHAEACTER  OF  EARLY  TAXATION. 

Tv/rgoVa  ca/nons  of  taxation — The  first  the  most  important — Adam 
Smith's  word,  "  enjoy '^  under  the  protection  of  the  State — The  Tcing's 
estate — The  consent  of  the  taxpayers  always  necessary — The  growth 
of  parliamentary  power — Customs  on  a  large  scale  impossible — 
Graduated  income  taxes — The  assessment  of  Tandridge  in  1600 — 
The  subsidy  and  its  frequency  in  wa/r  times — Taxes  on  towns — 
Tallages — The  income  taxes  of  1435  and  1450 — The  houses  of 
Lancaster  and  York — Grants  by  the  Commons,  origin  of  the 
custom — The  grants  of  1453  and  1503 — The  growth  of  the  Com- 
mons — Cecil's  book  of  rates — The  ship  money. 

The  history  of  English  taxation  in  early  times  is  totally  unlike 
anything  in  modern  experience.  It  was  exceptional,  not  regular, 
was  the  hardest  task  which  the  monarch  and  his  advisers  could 
undergo,  and  frequently  provoked  the  bitterest  resentments  and 
outbreaks.  At  the  same  time,  the  annals  of  parhamentary  finance 
are  full  of  the  strangest  precedents,  of  procedure  which  would  be 
thought  impossible  now,  of  Acts  which  modem  traditions  would  caU 
violent  invasions  of  property,  of  sacrifices  wiUingly  made  by  certain 
classes,  which  these  classes  have  at  least  been  long  unused  to,  of 
expedients  which,  unluckily  for  the  financier,  have  entirely  passed 
away,  as  human  societies  have  grown  more  aHke,  or  as  special 
advantages,  once  entirely  local,  have  been  diffused  over  the  world. 
Of  course,  the  economical  principles  which  regulate  or  interpret 
taxation  were  the  same  then  as  now,  and  these  principles  should  be 
before  us. 

The  famous  canons  of   taxation  which  Adam  Smith  borrowed 
from  Turgot,  are  four  in  number.     Taxation  should  be  equal,  on 


116     THE  CHABACTEB  OF  EABLY  TAXATION, 

which  presently.  It  should  be  certain,  not  capricious ;  should  be 
taken  at  a  time  when  it  is  most  conveniently  paid ;  and  should  be 
collected  as  economically  as  possible.  It  is  clear  that  the  last  three 
canons  are  only  subordinate  forms  of  the  first.  An  uncertain  tax 
is  plainly  unequal.  If  a  tax  is  levied  on  A  from  which  he  cannot 
escape,  and  the  same  tax  on  B  from  which  he  can  escape,  it  is 
uncertain  or  capricious.  For  example,  a  succession  duty  levied  on 
the  natural  heirs  of  a  man  who  is  not  rich,  cannot  be  evaded,  for 
the  present  owner  cannot  sacrifice  as  long  as  he  lives  his  mainten- 
ance from  his  property.  But  a  succession  duty  levied  on  a  man 
who  is  very  rich  may  be  evaded,  for  he  may  make,  and  often  does 
make,  a  donatio  inter  vivos,  and  may  still  leave  ample  means  for  his 
own  wants.  Again,  a  tax  on  property  is  always  certain,  a  tax  on  in- 
comes is  always  imcertain.  Instances  could  be  multiplied  without 
taking  one's  examples  from  mere  rapine,  such  as  Adam  Smith 
probably  had  before  his  mind  when  he  framed  his  second  canon. 
Of  course  where  this  kind  of  uncertainty  prevails,  society  has 
degenerated  into  brigandage. 

Again,  inconvenient  times  of  payment  are  an  element  of  inequality. 
When  in  the  old  epoch  of  the  customs  duties,  the  full  tax  was  paid 
on  the  imported  article  when  it  reached  the  port,  and  the  article  was, 
it  may  be  of  necessary,  but  of  uncertain  demand,  the  dealer  had  to 
recover  his  outlay  on  the  tax,  and  the  purchaser  had  to  pay  for  the 
delay  of  the  market.  Without  giving  a  decision  here  on  the  merits 
of  indirect  as  opposed  to  direct  taxation,  it  is  obvious  that  to  in- 
tervene the  shortest  possible  time  between  the  levy  of  the  tax  by 
the  dealer,  and  its  payment  by  the  purchaser  or  consumer,  is  a 
benefit,  and  therefore  its  reverse  is  an  injury.  But  injuries  are 
always  unequal.  To  make  the  taxpayer  contribute  more  than  a 
sufficient  cost  for  collection  is  certain  to  be  an  inequality,  for  even 
the  most  righteous  schemes  of  taxation  will  press  more  heavily  on 
some  individuals  than  others,  and  an  expensive  collection  augments 
the  burden. 

If  the  last  three  canons  of  taxation  are  only  illustrations  of  the 
first,  it  is  obviously  on  the  criticism  of  the  first  canon  that  a  clear 
view  of  the  subject  can  be  obtained.  But  the  language  of  Adam 
Smith,  like  the  language  of  Turgot,  is  exceedingly,  perhaps  in- 
evitably, ambiguous.    It  is  the  misfortune  of  political  economy,  a 


TTJBG0T8  CANONS  OF  TAXATION.  117 

misfortune  which  seems  special  to  it.,  that  no  ordinary  language 
supplies  it  with  a  sufficiently  correct  nomenclature,  and  that  defi- 
nitions of  words,  apparently  plain  enough,  are  essential  in  order  to 
a  true  interpretation  and  conception  of  the  ideas  which  they  are 
intended  to  convey.  Thus  the  four  cardinal  words  in  this  science 
or  philosophy — production,  distribution,  exchange,  consumption — 
popular  and  obvious  as  they  seem,  require  careful  limitation,  if  one 
would  obviate  contradiction. 

The  words  in  Smith's  canon  are  as  follows :  "  The  subjects  of 
eVery  state  ought  to  contribute  towards  the  support  of  the  govern- 
ment, as  nearly  as  possible,  in  proportion  to  their  respective 
abihties  ;  that  is,  in  proportion  to  the  revenue  which  they  respec- 
tively enjoy  under  the  protection  of  the  state."  And  Smith  goes 
on  to  compare  the  place  of  the  contributories  to  that  of  the  joint 
tenants  in  a  great  estate,  and  I  cannot  but  think  obscures  rather 
than  explains  his  meaning.  For  it  is  plain  that,  if  any  of  these 
tenants  receives  no  more  than  is  necessary  for  his  bare  maintenance, 
he  cannot,  without  perishing,  contribute  anything.  Now  such  a 
state  of  things,  as  I  shall  show  when  I  come  to  deal  with  pauperism, 
has  been  artificially  brought  about  in  English  economical  history. 
It  may  be  that  in  the  distribution  of  the  joint  products,  he  has  been 
violently  or  fraudulently  deprived  of  a  portion  of  that  which  is  justly 
due  to  him,  but  it  is  clear  that  he  cannot  contribute. 

It  has  always  seemed  to  me  that  the  critical  word  in  the  above 
canon  is  "enjoy."  To  have  used  the  word  "receive"  would  be  open 
to  the  fatal  objection  which  I  have  just  referred  to.  You  cannot 
tax  what  a  man  must  spend  without  destroying  his  industry  or  him, 
and  by  "must  spend,"  I  mean  the  quantity  which  is  absolutely  essen- 
tial to  his  labour  or  his  Hfe,  and  from  which  no  deductions  can  be 
made.  In  order  to  be  taxed,  every  one  must  have  something  beyond 
this  bare  margin.  But  what  a  person  need  not  spend,  he  can  save 
or  enjoy.  I  should  certainly  prefer,  instead  of  enjoy,  to  see  the  ex- 
pression "  can  save  "  in  the  definition,  for  I  am  sure  it  would  have 
reheved  the  ambiguity  of  the  canon,  and,  which  is  more  important, 
have  made  clear  some  important  fallacies  in  the  practice  of  finance, 
which  one  may  despair  of  seeing  corrected  in  practice,  but  which 
should  be  constantly  exposed  and  refuted.  Besides,  a  man  may  en- 
joy, in  the  mere  physical  sense,  that  which  he  is  obliged  to  spend, 


118  TBE  CHABACTEB  OF  EABLY  TAXATION. 

and,  perhaps,  the  less  he  has  which  he  must  spend,  the  keener  is 
his  enjoyment  in  spending  it.  The  bread  of  a  labouring  man  is 
sweet,  but  it  may  be  absolutely  necessary  for  his  Hfe. 

I  have  referred  to  these  facts  because  they  are  of  necessary  rela- 
tion to  all  systems  of  taxation,  early  and  recent,  though  so  great  is 
the  power  of  administrations  in  our  time,  and  so  slight  is  the  check 
which  can  be  put  on  them,  that  resentment  at  expenditure  or  anger 
at  improvident  taxation  are  not  found  to  be  checks,  while  gross  and 
palpable  unfairness  in  the  imposition  of  taxes  provokes  little  com- 
ment beyond  impotent  indignation.  There  is  no  tax  so  unfair  as 
the  English  income  tax.  It  adds  to  the  sense  of  unfairness  when 
one  knows  that  half  of  it  is  imposed  in  order  to  relieve  landowners 
of  liabilities  and  expenditure  without  which  their  property 
would  have  no  value  at  all,  which,  till  recent  times,  have  always 
been  paid  by  them ;  while  in  the  assessments  of  their  own  mansions 
to  rates,  income  tax,  and  succession  duty,  they  are  most  iniquitously 
exempt. 

The  aggregate  of  taxation,  except  that  which  is  levied  for  local 
purposes,  is  considered,  however  appropriated,  as  a  grant  to  the 
Crown.  This  is  a  tradition  from  the  earliest  times,  when  the  grant 
to  the  king  was  supplementary  to  the  ordinary  revenue  from  the 
king's  estate.  For  it  is  in  the  interpretation  of  what  the  king's 
estate  was,  that  not  a  little  of  the  social  history  of  our  forefathers  is 
contained.  It  was  because  he  did  not  live  on  his  estate,  and  satisfy 
the  high  duties  of  his  office  from  the  proceeds  of  that  estate,  that 
discontent  was  openly  expressed ;  that  in  many  cases  discontent 
grew  into  insurrection,  and  to  the  deposition  of  kings,  so  that  the 
English,  from  their  constant  and  loudly  expressed  dislike  to  this 
form  of  misgovernment,  so  unintelligible  to  foreigners,  got  the  name 
of  the  disloyal  nation.  The  feeling  was  not  extinct  till  after  the 
Eevolution,  when  a  check  was  put  on  William  III.'s  grants,  and 
Davenant  wrote  on  the  doctrine  of  Resumptions. 

The  king's  estate  was  the  great  mass  of  property,  scattered  over 
England,  which  went  by  the  name  of  terra  regis,  of  ancient  demesne, 
an  estate  described  and  valued  in  Domesday.  The  English  people, 
including  Norman  baron,  franklin,  and  burgher,  expected  that,  ex- 
cept in  times  of  extraordinary  pressure,  this  estate,  with  its  numerous 
incidents,  should  suffice  for  the  adequate  maintenance  of  the  king's 


THE  KING'S  ESTATE.  119 

dignity,  of  his  own  forceg  or  guards,  unless  their  service  was  due  by 
tenure,  of  his  household,  of  his  judges,  of  the  officials  connected 
with  the  exchequer,  of,  in  short,  the  whole  machinery  of  civil 
government.  No  doubt,  because  the  clergy  were  the  only  literary 
or  educated  class,  or  at  least  nearly  so,  the  officials  were  generally 
drawn  from  the  clerical  order,  but  as  the  king  was  the  principal 
patron  of  benefices,  and  had  a  commanding  influence  in  election  to 
the  higher  dignities  of  the  Church,  the  convenience  of  selecting 
officials  from  the  clergy,  and  of  rewarding  them  with  preferment, 
was  obvious  and  economical.  Besides  the  profits  of  his  estates,  whicH 
the  king  cultivated  by  his  bailiffs,  just  as  the  nobles  and  the  corpora- 
tions did,  the  king  had  divers  other  casual  advantages,  as  aids,  reliefs, 
escheats,  and  forfeitures — the  character  of  which  can  easily  be 
gathered  from  ordinary  books  on  the  practice  of  early  English  law. 
Besides  this,  the  king  had  small  customs  on  exports  and  imports, 
fee  farm  rents  from  the  towns  which  were  directly  subordinated  to 
him,  and  as  soon  as  the  courts  of  law  were  developed  from  the 
machinery  of  the  exchequer,  fees  of  courts,  and  fiines  on  offenders. 
From  this  revenue  the  king  was  supposed  to  guarantee  the  peace, 
to  protect  the  narrow  seas,  and  to  provide  for  such  other  charges  as 
were  the  duties  of  his  dignity. 

But  he  expected  and  obtained,  on  extraordinary  occasions,  extra- 
ordinary or  exceptional  assistance  from  his  people.  He  claimed, 
beyond  the  obligation  imposed  on  all  free  men  of  serving  in  the 
militia  at  their  own  charges,  the  personal  attendance  of  all  his 
tenants  in  chivalry  for  a  definite  time,  a  service  which  was  early 
commuted  for  a  money  payment  when  the  service  was  foreign.  This 
commutation,  which  is  said  to  have  been  suggested  by  Becket,  had 
most  important  results.  The  concession  of  it  was  the  origin  of  that 
remarkable  English  army,  which  did  such  exploits  on  foreign  mili- 
tias in  the  fourteenth  and  fifteenth  centuries,  and  was  undoubtedly 
the  reminiscence  on  which  Cromwell  founded  and  developed  his 
New  Model.  It  contained  also,  by  implication  and  in  course  of  time, 
the  principle  of  parliamentary  grants,  for  it  is  obvious,  that  if  the 
king  could  at  his  will  determine  the  occasions  on  which  his  tenants 
should  ransom  their  personal  service,  he  could  speedily  have  been 
able  to  perpetuate  a  discretionary  tax  on  all  his  subjects. 

The  king  a-ppears  to  have  exercised  this  discretion  without  res- 


120  TEE  CHABACTEB  OF  EABLY  TAXATION. 

traint  on  his  own  demesnes,  and  the  towns  which  were  in  his  own 
hand,  or,  in  the  language  of  the  time,  could  tallage  them.  But  even 
here  it  is  plain  that  a  limit  had  to  be  put  on  extortion ;  and  that 
the  patience  of  the  burghers  could  not  with  safety  be  too  sorely 
tried.  It  was  part  of  the  theory  of  that  relation  of  ranks  and 
classes,  which  is  called  still,  for  want  of  a  better  phrase,  the  feudal 
system,  that  while  duties  w(  re  reciprocal,  dues  were  fixed.  As  soon  as 
ever  contemporary  economic  history  can  be  constructed  from  con. 
temporaneous  documents,  we  find  that  all  liabilities,  from  those  of 
the  serf  to  those  of  the  noble,  were  fixed  and  definite ;  that  they 
were  registered  in  instruments  which  had  authority,  and  could  not 
safely  be  strained.  The  type  of  these  enrolled  liabilities  was 
Domesday,  from  which  we  are  told,  in  the  laws  of  the  time,  the  serfs 
of  the  last  quarter  of  the  fourteenth  century  deduced  legal  arguments 
in  favour  of  their  own  freedom. 

The  duty  of  the  dependant  owner  appears  to  have  been  practically 
unlimited  in  a  case  of  great  emergency.  All  the  chroniclers  of 
Eichard  I.'s  reign  bear  testimony  to  the  crushing  weight  which  the 
country  had  to  endure  when  the  king  was  ransomed  from  his  Ger- 
man captivity.  Nor,  throughout  its  history,  did  the  people  or  the 
Parliament  refuse  to  bear  chaises  for  vindicating  the  honour,  enfor- 
cing the  rights,  maintaining  the  estates,  or  protecting  the  person  of 
the  king. 

I  have  not  space  or  inclination  to  go  through  those  obscure  hints 
which  are  given  us  as  to  the  restraint  of  arbitrary  taxation  during 
the  times  of  the  early  Plantagenet  kings.  They  are  collected  and 
commented  on,  with  more  or  less  ingenuity  and  accuracy,  by  con- 
stitutional antiquaries,  whose  conclusions  as  to  the  meaning  of  the 
facts  or  hints  which  they  find  are  derived  from  evidence  of  very 
various  value.  In  my  opinion  the  consent  of  the  taxpayer  to 
extraordinary  grants  had  to  be  obtained  at  all  times,  and  the  framers 
of  the  Great  Charter  were  not  puttmg  new  limitations  on  the  power 
of  the  Crown  when  they  drew  up  the  memorable  clauses  in  that 
ancient  instrument,  but  were  simply  affirming  what  was  customary 
or  notorious.  I  am  satisfied  and  convinced  that  discretionary  taxa- 
tion by  the  king  was  utterly  alien  to  the  genius  of  such  institutions 
as  were  estabUshed  by  the  Teutonic  settlers  of  Saxon  England,  and 
were  merely  changed  in  name  by  the  Norman  adventurers.    I  am 


THE  CONSENT  OF  THE  TAXPAYER  NECESSABY.      121 

persuaded  that  a  more  or  less  formal  appeal,  but  generally  an 
efifective  appeal,  was  made  to  popular  consent  before  and  after  the 
days  of  the  Great  Charters  of  John  and  Henry. 

Of  course  the  most  characteristic  and  significant  of  these  appeals 
was  after  the  unlucky,  the  fatuous  attempt  to  procure  the  kingdom 
of  Sicily  for  Henry's  second  son,  Edmond.  This  brings  out  what 
must  have  been  the  practice,  the  occasional  convention  of  taxpayers 
through  their  proctors,  representatives,  or  agents,  for  the  purpose 
of  making  and  assessing  grants.  Substituted  service,  guarantees, 
vicarious  responsibility,  were  of  the  essence  of  early  English  social 
life.  The  principle  of  suretyship  or  transferred  liability  was  pre- 
sent in  every  village.  The  jury  of  compurgators  is  one  illustration, 
and  of  the  most  significant  kind.  The  Hability  of  a  host  for  his 
stranger  guests  was  another.  The  system  of  giving  vicarious  security 
for  debts  is  a  third.  The  old  law  of  collective_attornment  is  a  fourth. 
The  representative  theory  was  at  the  bottom  of  much  in  village 
life,  and  must  have  been  familiar.  We  may  be  sure  that  the  early 
custom  of  appointing  numerous  assessors  for  the  award  of  parlia- 
mentary grants  was  in  succession  from  practices  antecedent  to  the 
formal  and  regular  summons  of  these  assemblies,  which  in  their 
particular  form  were  characteristic  of  the  constitutional  history  of 
England. 

The  experiment  of  Simon  de  Montfort,  in  1258,  has  always  ap- 
peared to  me  to  be  an  attempt  on  the  part  of  this  remarkable  man 
to  commit  by  their  proxies  or  representatives  whatever  English  sym- 
pathizers he  could  get  in  support  of  his  policy.  He  must  have 
known  that  the  alliance  which  he  had  formed  was  a  rope  of  sand, 
united  solely  by  indignation  at  existing  discontents,  and  not  entirely 
trustworthy  for  that.  The  dissent  and  revolt  of  those  who  were  asso- 
ciated with  him,  and  the  rapid  change  in  his  position,  from  apparently 
overwhelming  strength  to  hopeless  weakness  and  defeat  in  detail, 
must  have  been  in  part  anticipated  by  the  shrewd  and  sagacious 
head  of  the  Barons'  War.  It  would  have  seemed  that  henceforward 
the  very  name  of  a  representative  assembly  would  have  been  odious 
to  royal  ears,  and  perhaps  the  period  of  over  thirty  years  which 
elapsed  between  the  summons  of  De  Montforfc's  Parliament  and  the 
first  recorded  of  Edward  may  be  due  to  this  dislike. 

Edward  was  far  too  sagacious  a  person,  however,  to  be  affected  by 


122  THE  CHABACTEB  OF  EABLY  TAXATION. 

names.  He  was  engaged  in  a  great  project ;  one  which,  so  far  as 
part  of  his  purposes  is  concerned,  was  frustrated — the  complete 
subjugation  of  Wales  and  Scotland.  The  former  he  may  be  said 
to  have  effected,  in  the  latter  he  failed.  Of  course  his  purpose  was 
to  annex  Scotland  south  of  the  Tay,  or  perhaps  east  of  the  line  now 
traversed  by  the  Caledonian  canal.  It  has  always  seemed  to  me 
that  the  frequency  with  which  he  styled  himself,  or  allowed  himself 
to  be  styled,  Edward  III.  was  intended  to  indicate  that  he  con- 
ceived himself  heir  to  the  pretensions  of  the  Anglo-Saxon  kings. 
He  saw  that,  in  the  great  necessity  which  he  had  for  extraordinary 
grants,  that  it  was  desirable  that  there  should  be  a  fair  and  search- 
ing assessment  of  taxable  property  when  these  grants  were  made, 
and  that  a  formal  assent,  with  a  careful  appointment  of  assessors, 
would  obviate  discontent.  His  plan  was  a  novel  one.  The  chattels 
of  every  one,  free  and  serf,  were  assessed ;  generously,  I  am  con- 
vinced, for  I  have  compared  valuations  with  actual  prices,  the 
record  of  these  valuations  existing  in  the  public  archives  to  a  con- 
siderable extent,  and  when  they  are  complete  being  a  virtual  register 
of  lay  householders.  It  was  a  subordinate,  but  not  an  unimportant 
part  in  the  new  system  that  the  representatives  were  encouraged  to 
present  petitions,  and  to  assent  to  the  legislative  designs  of  the 
sovereign.  That  Edward  cared  much  less  for  the  assent  of  his 
parliaments  than  he  did  for  their  usefulness  as  assessors  is,  to  my 
mind,  proved  very  conclusively  by  the  expedient  which  he  used  to 
make  the  clergy  submit  to  him,  when  they  refused  him  grants  and 
appealed  to  the  Bull  Clericis  laicos,  which  they  had  procured  from 
Boniface  VIII.     Never  was  victory  more  complete. 

Nothing  is  more  remarkable  than  the  progress  of  the  power  which 
Parliament  assumed  between  the  first  summons  of  the  House  of 
Commons  in  1291,  and  the  Statute  of  York  thirty  years  later.  But 
the  result  was  inevitable.  The  occasions  on  which  grants  were  de- 
manded were  criticised,  petitions  were  presented,  grievances  were 
discussed,  and  redress  claimed,  and  finally  the  statute  to  which  I 
have  referred,  enacted  that  no  valid  Act  of  the  legislature  could  be 
affirmed,  except  with  the  consent  of  the  two  Houses.  The  Statute 
of  York  was,  to  be  sure,  announced  at  the  instance  of  the  king, 
who  wished  to  declare  on  authority  that  the  sentence  on  the 
Despensers  was  illegal.    But  the  form  was  of  great  constitutional 


THE  GBOWTH  OF  PABLIAMENTABY  POWEBS.        123 

importance,  and  its  significance  is  suggested  by  the  universal  tran- 
scription of  it  in  the  legal  handy-books  of  the  period,  several  of 
which  I  have  examined. 

Now,  by  the  necessity  of  things,  nearly  all  ancient  taxation  was 
direct.  It  would  have  been  impossible,  had  the  trade  of  the  coun- 
try been  far  greater  than  it  was,  to  have  collected  customs  of  any 
significant  amount  on  exports  and  imports,  even  if  the  principle  of 
the  staple  towns,  on  which  I  have  something  to  say  hereafter,  had 
been  recognized.  Southern  England,  then  the  most  settled  and 
best  cultivated  part  of  the  island,  swarms  with  natural  harbours ; 
harbours  safe  and  accessible  to  the  hght  craft  of  the  time.  Any 
attempt  to  levy  solid  duties  would  have  been  defeated.  Centuries 
after  the  time  of  the  first  Edward,  when  the  population  was  at 
least  double  the  number  that  it  was  at  the  end  of  the  thirteenth 
century,  it  was  admitted  that  heavy  duties  were  impossible.  In 
the  arithmetic  of  the  customs,  said  Swift,  two  and  two  do  not 
make  four.  In  the  eighteenth  century  the  costs  of  collecting  indirect 
taxation  in  Scotland  were  in  excess  of  the  product  collected,  for 
every  Scotchman  who  could*  smuggled  or  connived  at  smuggling. 
The  relations  of  Dirk  Hatteraick  and  Ellangowan  in  Scott's  novel 
are  historical,  as  most  of  Scott's  pictures  of  local  life  during  the 
times  of  his  memory  and  his  experience  are.  The  pious  and 
patriotic  Scotchman,  who  identified  the  loss  of  claret  with  the  loss 
of  the  Scottish  Parliament,  felt  that  the  best  way  to  denoimce  the 
"  sad  and  sorrowful  union,"  as  well  as  the  most  agreeable  and 
economical,  was  to  defraud  the  revenue  of  Great  Britain.  I  am 
half  a  Scot  myself,  and  can  reahze  the  pleasure  derived  from  the 
combLaation  of  patriotism  and  good  business.  In  the  nineteenth 
century,  when  the  fiscal  system  of  England  was  designed  to  protect 
and  foster  home  industries,  smuggling  was  an  organization,  with 
its  own  capital  and  its  own  warehouses — its  operations  being  pro- 
tected by  the  sympathy  of  the  gentry  and  the  farmers.  I  was 
brought  up  in  a  Hampshire  village,  which  in  my  childhood  was 
famihar  with  and  shared  in  the  successes  of  the  contraband  trade. 
A  wiser  system  of  finance  in  England  has  generally  improved  the 
smuggler  off.  But  I  very  much  doubt  whether  he  is  extinct  in 
remote  parts  of  the  United  Kingdom. 

Now  direct  taxation  is  always  irritating,  and  is  always  more 


124  THE  CHABACTEB  OF  EABLY  TAXATION. 

unequal  than  indirect.  It  exacts  equal  ransom  from  unequal 
means.  Two  persons  with  the  same  amount  of  property  are 
unequally  taxed,  if  the  one  has  a  wide  margin  over  the  necessary 
charges  of  his  household  and  the  other  a  narrow  one.  In  modern 
England  this  unfairness  is  characteristic  of  all  direct  taxation.  One 
man  lays  out  £100,000  on  a  house,  surrounds  it  with  a  park,  and 
accumulates  amenities  about  it.  It  is  quite  certain  that  under  the 
Act  of  William  IV.,  the  assessment  Act,  he  will  neither  in  local 
taxation  as  an  occupier,  or  in  income  tax  as  an  owner,  or  in  house 
duty  as  a  householder,  or  in  succession  duty  as  a  devisor,  pay  more 
than  a  quarter  per  cent,  of  its  annual  value  to  local  and  imperial 
taxation  ;  while  another  man,  who  has  laid  out  £1000  on  his  house, 
will  have  to  pay  in  proportion  twenty  times  as  much  on  his  occu- 
pancy and  ownership.  And  then  good  easy  people  are  astonished 
at  socialist  talk,  and  at  projects  for  the  appropriation  of  the  un- 
earned increment,  and  at  doubts — freely  enough  expressed — as  to 
whether  the  machinery  of  Parliament  and  the  Constitution  are 
not  employed,  under  the  well-known  economical  fact,  that  the  laws 
which  regulate  the  distribution  of  wealth  are  of  human  institution 
only — to  make  the  rich  richer,  and  the  poor  poorer. 

To  do  them  justice,  our  ancestors  in  England  were  free  from  these 
sordid  and  dishonest  practices.  They  recognized  that  a  graduated 
property  tax  was  just  and  right,  even  in  the  Upper  House ;  and 
they  acted  on  the  conviction,  as  I  shall  take  occasion  to  show.  In 
the  poll  tax  which  was  levied  in  1377,  the  Duke  of  Lancaster  was 
rated  at  520  times  the  payment  of  the  peasant.  In  1435  and  1450, 
a  graduated  income  tax  was  levied  at  the  rate  of  2|-  per  cent,  on 
small  incomes,  of  10  per  cent,  on  large.  And  the  same  principle 
regulated  local  taxation  a  century  and  a  half  later.  In  March, 
1600 — I  am  referring  to  the  original  MS.  preserved  in  the  Bodleian 
library  (Rawlinson  Papers,  C.  642) — a  committee  of  the  inhabi- 
tants of  Tandridge,  in  Surrey,  a  village  near  the  borders  of  Kent, 
met  to  survey  and  assess  the  parish  for  a  rate  for  the  relief  of  the 
poor,  for  maimed  soldiers,  for  the  Surrey  prisons  and  hospital,  and 
for  a  composition  in  lieu  of  purveyance.  The  unit  is  a  penny  per 
acre,  the  acreage  of  the  parish  being  returned  at  2,391.  Now  the 
justices  of  the  peace  agree  and  rule  that  the  rate  should  be  paid  only 
once  a  year  by  occupants  under  ten  acres,  not  more  than  twice  by 


GBADUATED  INCOME  TAXES.  126 

occupants  under  thirty  acres,  and  that  all  further  charges,  if 
required,  should  be  borne  by  those  who  have  over  thirty  acres — in 
this  case,  fourteen  occupiers  out  of  fifty-five.  But  the  magistrates 
add  this  significant  clause:  "Provided  always  that  our  intent  and 
meaning  is  that  those  who,  be  owners  and  men  of  abiUty  and  have 
little  occupying,  shall  be  charged  according  to  their  ability  by  the 
justices'  discretion  towards  the  rehef  of  the  poor,  notwithstanding 
the  said  rates  aforesaid."  It  is  a  common  practice  with  country 
gentlemen  to  demand  that  rich  men  with  a  small  occupancy  should 
be  rated  on  their  means.  Let  the  country  gentlemen  begin  with 
an  honest  rating  of  their  own  mansions  and  parks,  as  the  country 
gentlemen  of  1600  did. 

The  distrust  felt  at  extraordinary  grants  was  therefore  very  keen, 
when  the  proposal  was  made  at  a  tinae  of  no  particular  emergency. 
Hence  the  pubhc  looked  on  royal  favourites  with  great  dislike,  because 
they  knew  that  the  impoverishment  of  the  Crown  would  be  a  plea 
for  grants.  This  explains  the  disfavour  with  which,  in  Henry  III.'s 
reign,  the  people,  nobles,  burghers,  and  peasants  ahke  looked  on 
the  aggrandisement  of  his  half-brothers  and  his  wife's  relations  by 
the  king.  There  was  mixed  with  this  feeling  a  little  of  the  dis- 
like which  Englishmen  have  felt  to  such  foreigners  as  get  a  footing 
in  England,  and  presume  to  meddle  with  its  pubhc  business,  either 
by  the  front  or  back  stairs.  So  the  English  hated  Gaveston  and 
the  Despensers  in  Edward  H.'s  time,  though  the  latter  belonged 
to  the  ranks  of  the  Norman  English.  So  in  the  days  of  Edward's 
great-grandson  the  people  rose  against  De  Vere,  and,  later  on, 
against  the  obscurer  favourites  which  Eichard  honoured.  The 
extreme  favour  which  was  shown  to  the  Poles  and  Beauforts  had  a 
good  deal  to  do  with  the  feeling  which  led  to  the  deposition  of  the 
house  of  Lancaster.  The  riches  of  the  Seymours  and  the  Dudleys 
roused  even  the  Lollards  of  Norfolk  against  the  Keformation,  for 
they  were  collected  from  public  plunder.  Buckingham  was  the 
beginning  of  that  political  opposition  to  Charles,  which  ended  with 
the  tragedy  of  Whitehall ;  and  I  am  convinced  that  if  the  second 
Charles  had  lived  much  longer,  he  would,  like  his  brother,  have 
been  driven  out  of  England.  The  gravest  error  in  policy  which 
William  committed  was  his  mcomprehensible  fondness — I  speak 
the  opmion  of  the  time — for  Bentinck  and  Keppel,  and  the  enor- 


126  THE  CHABACTEB  OF  EABLY  TAXATION, 

mous  grants  which  were  heaped  on  the  former,  making  him,  from 
the  status  of  an  inferior  Dutch  noble,  one  of  the  richest  men  in 
England.  It  was  in  order  to  give  effect  to  the  public  feeling  enter- 
tained about  these  scandals,  that  Davenant  tried  to  revive  the  old 
doctrine  of  Eesumptions. 

The  theory  that  the  Crown  could  not  be  permitted  to  impoverish 
the  king's  estate  was  universally  entertained  through  the  Middle 
Ages,  and  far  down  into  modem  history.  The  statutory  restraint, 
it  is  true,  was  enacted  when  the  Crown  had  little  left  to  give,  and 
Parhament,  by  appropriating  the  civil  Hst,  and  leaving  the  sove- 
reign a  moderate  allowance  for  the  privy  purse,  intended  that  it 
should  give  nothing.  The  principle  of  the  Eevolution  was  that  the 
Crown  should  be,  even  for  the  private  expenditure  of  the  sovereign, 
entirely  dependent  on  Parliament.  This  principle  was  formally 
abandoned  in  1850 ;  on  which  occasion  Lord  Brougham  made  a 
remarkable  protest,  in  which  the  constitutional  theory  was  very 
forcibly  stated,  and  the  inferences  from  a  violation  of  it  were  very 
plainly  predicted. 

Edward  I.  saw  very  clearly  that  arbitrary  taxation,  even  if 
it  were  possible,  was  less  likely  to  be  fruitful  than  taxation  by 
consent.  His  maxim,  it  is  said,  was  that  what  concerned  all 
should  be  shared  by  all ;  and  he  certainly  intended  to  tax  all,  for, 
as  I  have  said,  his  taxing  bills  amount  to  a  census  of  families.  But 
when  the  grants  were  agreed  to,  there  intervened  that  inveterate 
determination  or  custom  of  the  English  to  grant  only  a  fixed 
quantity  and  distribute  it  rateably.  It  is  said  that  a  subsidy,  as 
tJie  parliamentary  grant  came  to  be  called,  was  originally  £100,000. 
In  EKzabeth's  time  it  had  sunk  to  ^650,000  or  less.  The  fact  is, 
remissions  were  made,  additions  could  not  be  made.  Some  of  these 
remissions  appear  to  be  personal,  for  petitions  were  constantly 
made  to  th«  Crown  praying  for  exemptions  ;  the  general  answer  to 
such  petitions  being,  it  appears,  a  reference  to  an  inquisition,  tech- 
nically called  ad  quod  damnum — the  question  beiug  to  what  extent 
would  the  revenue  of  the  Crown  suffer  by  such  a  concession.  In 
the  fifteenth  century,  too,  a  custom  grew  up  of  remitting  the  opera- 
tion of  the  subsidy  in  the  case  of  certain  towns  or  villages  which, 
for  a  more  or  less  permanent  reason,  were  incapacitated  from  con^ 
tributing.     So  it  seems  that  the  Universities  of  Oxford  and  Cam- 


THE  SUBSIDY,  AND  ITS  FBEQUENCY  IN  WAB  TIMES.  127 

bridge,  and  the  college  sites  therein,  with  the  two  ancient  schools 
of  Winchester  and  Eton,  were  exempt  from  the  local  assessment, 
though  it  does  not  appear  that  their  estates  were. 

During  the  long  wars  of  succession  between  England  and  France, 
continued,  except  in  the  reigns  of  Eichard  II.  and  Henry  IV.  for 
a  hundred  years,  these  parliamentary  grants  were  incessant.  Even 
during  the  reign  of  Henry  IV.,  when  there  were  only  civil  dis- 
turbances to  deal  with,  the  king  was  constantly  appealing  to 
Parliament  for  assistance,  and  was  constantly  constrained  in  con- 
sequence, to  listen  to  very  unwelcome  counsel.  Many  of  these  are 
to  be  found  in  the  rolls  of  Parliament.  But  for  the  fourteentli 
century,  I  am  sure  the  rolls  of  Parliament  are  defective.  There 
are  parUaments,  of  whose  proceedings  no  record  is  preserved. 
There  are  grants  of  taxes,  for  which  no  existing  document  gives 
authority.  I  have  found  them,  however,  among  its  items  of  ex- 
penditure duly  entered  in  the  bailiff's  account,  and  such  an  entry 
is  conclusive  as  to  the  fact,  especially  when  the  document  adds 
that  it  was  a  grant  to  the  king.  The  memory  of  the  employer  or 
lord  was  certainly  to  be  trusted  at  the  annual  audit. 

Now  all  these  taxes  were  property  taxes.  The  assessment  was 
made  by  numerous  commissioners,  in  order  that  the  valuation 
might  be  taken  at  as  simultaneous  a  time  as  possible.  The 
farmer's  stock  and  crops  were  not  taxed,  but  what  had  been  stored 
and  was  for  sale  became  liable,  his  com,  for  instance,  and  wool 
in  the  bam.  The  landowner's  rent  and  value  was  taxed.  The 
stock-in-trade  of  the  dealer,  never,  I  suspect,  any  great  matter, 
was  taxed,  as  were  also  the  household  goods  of  the  poorest  as  well  as 
the  richest.  It  appears  that  personal  apparel  was  not  valued.  I 
have  examined  many  of  these  assessments,  and  I  speak  from 
memory,  but  confidently,  when  I  say  that  the  valuation  was  from 
30  to  40  per  cent,  below  the  value  of  the  goods  appraised.  It 
would  have,  I  think,  been  dangerous  to  have  exacted  the  tax  from 
the  fuU  value. 

The  taxes  levied  on  the  towns  were  peculiar.  They  had  been 
held  in  a  certain  sense  to  be  the  property  of  the  king,  or  under  his 
immediate  lordship,  or  to  have  stood  in  the  same  relation  to  some 
secular  or  ecclesiastical  chief.  For  example,  the  town  of  Oxford 
was  under  the  Crown,  the  town  of  Bury  was  under  the  great  Abbo 


128  THE  CHAEACTEB  OF  EABLY  TAXATION. 

of  St.  Edmund.  These  personages  granted  charters,  or  confirmed 
privileges  for  a  sum  of  money  down,  and  for  an  annual  rent  or 
farm,  wiiich  went  by  the  name  of  the  Jirma  burgi,  and  was  like 
other  charges,  fixed  and  unalterable.  Hence  the  grant  of  the  fee- 
farm  rent  of  a  town  was  a  common  benefaction  of  king  or  lord. 
The  fee-farm  rent  of  Oxford  was  in  early  times  constituted  a  gift 
to  the  almshouses  of  St.  Bartholomew  in  Cowley  Marsh.  Edward 
II.  transferred  it  to  Oriel  College,  with  the  lands  and  house  of  the 
bedesmen,  on  condition  that  the  fellows  should  maintain  these 
mendicants.  The  fee  farm  rent  of  Scarborough  was  granted  by 
Edward  III.  to  the  King's  Hall  of  Cambridge,  a  foundation  now 
fused  into  Trinity  College  as  part  of  its  endowment.  And  in  the 
same  way  licenses  to  found  guilds  in  towns,  especially  in  London, 
were  granted  for  a  consideration.  Privileges  of  all  sorts,  the  right 
to  manage  their  own  affairs,  to  appoint  their  own  judges,  to  be 
lords  over  their  own  manor,  were  bought,"  and  often  re-bought,  on 
confirmation.  One  of  our  colleges  here,  Magdalene,  paid  a  con- 
siderable sum  on  the  accession  of  Henry  VIII.  for  a  renewal  or 
confirmation  of  its  charter.  In  short,  there  is  no  ancient  right  of 
special  jurisprudence,  or  property,  or  license,  which  has  not  in 
time  past,  we  may  be  sure,  been  paid  for,  the  times  considered, 
handsomely. 

But  beyond  this  annual,  or  occasional,  or  recurrent  Liability,  the 
towns  in  early  times  were  liable  to  what  were  called  tallages. 
That  the  feudal  superior  had  the  power  to  claim  a  contribution 
from  the  towns  dependent  on  him,  as  often  as  he  pleased,  or  to 
what  extent  he  pleased,  is  not  to  be  believed,  for  it  would  be 
equivalent  to  the  surrender  of  all  the  townsf oiks'  goods.  But  that 
application  was  made  for  an  exceptional  but  fixed  contribution  from 
time  to  time,  which  the  town  had  some  discretion  in  refusing  or 
evading,  is  certain.  At  last,  in  an  indirect  way,  at  the  conclusion 
of  the  thirteenth  century,  Edward  formally  renounced  the  claim  of 
tallage,  or  was  reputed  to  have  done  so,  and  though,  I  beheve, 
antiquaries  have  found  traces  of  the  usage  at  a  later  time,  the  last 
attempt  being  in  1332,  it  became  settled  custom  that  such  grants 
could  be  made  by  Parliament  only.  Ten  years  before,  in  1322,  the 
last  scutage  was  levied.  In  point  of  fact  the  free  will  of  the 
grantor  was  always  a  presumption,  and  sometimes  a  reahty.    Thus 


TAXES  ON  TOWNS,     TALLAGES.  129 

in  1255  the  Londoners  relased  to  submit  to  a  tallage,  and  though 
they  afterwards  yielded,  the  resistance  had  a  serious  meaning,  as  the 
king  learnt  at  Lewes. 

Just  as  in  country  districts,  villages,  hundreds,  and  shires,  the 
assessment  was  made  by  commissioners  appointed  in  the  grant, 
who,  as  I  have  found  occasionally,  were  bribed  to  show  considera- 
tion to  the  contributories,  so  in  towns  the  local  authorities 
distributed  the  assessment  or  tallage.  On  the  ground  that  this 
assessment  was  levied  unfairly  on  the  poorer  citizens,  Fitzozbert  or 
Long  Beard  in  Richard  the  First's  reign  appears  to  have  headed  a 
party  and  resisted  the  authorities.  He  lost  his  life.  But,  on  the 
whole,  I  conceive  that  the  taxation  was  equitable.  I  should  have 
certainly  found  some  record  of  dissatisfaction  had  it  not  been  just, 
as  I  conclude  from  the  almost  total  silence  of  the  accounts  up  to 
the  great  change  in  the  value  of  money,  that  the  ancient  right  of 
purveyance  and  pre-emption  was  not  used  harshly  and  dishonestly 
by  the  king's  officers. 

The  long  war  with  France  induced  the  king's  officials  to  bethink 
themselves  of  other  sources  of  revenue,  besides  the  ordinary 
subsidies.  But  as  I  have  already  stated,  unless  the  places  of 
export  and  import  were  strictly  defined,  as  they  ultimately  were  by 
the  staple  towns,  it  was  impossible  to  collect  any  certain  or  regular 
revenue  from  articles  of  merchandise.  Hence  the  first  efforts  in  the 
direction  of  taxation  on  purely  English  products  were  rather  in  the 
nature  of  the  excise  than  a  customs  duty.  Such,  for  example,  was 
the  tax  of  40s.  a  sack  on  wool  in  1297,  and  the  levy  of  nearly 
21,000  sacks  in  1341,  the  proportion  of  which,  down  to  quarters 
of  pounds  of  the  article,  was  distributed  by  Parliament  over  the. 
several  counties,  and  as  I  know  from  the  records  of  estates  on 
which  no  sheep  were  kept,  was  payable  in  money  at  a  fixed  rate 
per  sack.  Such  were  the  poll  taxes  which  began  in  1377,  and 
were  continued  till  after  the  Revolution. 

But  after  the  establishment  of  Calais  as  the  staple  town  for  the 
sale  of  wool,  or  at  least  as  the  port  of  delivery,  the  financiers  of 
the  fifteenth  century  began  to  discover  that  this  article  could 
become  a  fruitful  source  of  occasional  revenue.  The  English 
people,  and  with  reason,  beUeved,  on  grounds  which  I  have  stated 
in  an  earUer  lecture,  that  the  foreign  consumer  would  pay  the  tax, 

10 


180  TEE  CHABACTEB  OF  EABLY  TAXATION. 

Besides,  they  were  under  an  impression,  probably  a  premature 
impression,  that  the  export  duty  would  materially  assist  the  home 
manufacture  of  woollen  goods.  Hence  over  and  over  again,  during 
the  second  war  of  succession  with  France,  taxes  of  100  per  cent, 
are  laid  on  wool  and  wool-fells,  and  borne  without  difficulty,  while 
it  was  soon  found  that  exported  hides  would  only  bear  a  slight 
duty.  The  English  had  a  practical  monopoly  of  wool,  but  no 
such  advantage  in  hides  and  leather. 

In  the  same  epoch,  very  remarkable  income  taxes  are  levied 
on  those  who  possessed  fixed  sources  of  personal  revenue,  the 
legislature  never  dreaming  of  putting  such  a  tax  on  precarious 
incomes.  The  first  of  these,  as  far  as  the  rolls  of  Parliament 
instruct  us,  was  in  1435.  The  immediate  occasion  of  the  impost 
is  to  provide  for  the  king's  debts,  which  had  increased  to  an 
enormous  amount  (the  king  was  about  fourteen  years  old)  and 
represent  the  plunder  which  went  on  during  his  minority.  The 
tax  was  graduated,  6d.  or  2^  per  cent,  on  incomes  from  fixed 
sources  between  £5  and  dglOO  a  year;  8d.  or  3-33  per  cent,  on 
incomes  between  £100  and  £400  a  year,  and  2s.  or  10  per  cent, 
on  all  incomes  in  excess  of  £400  a  year.  In  1450,  when  the 
French  possessions  were  practically  lost,  another  income  tax  was 
imposed  in  which  the  taxable  unit  was  taken  lower.  Between 
20s.  and  £20  of  income,  the  rate  is  a  2|  per  cent. ;  between  £20 
and  £200,  5  per  cent. ;  and  on  all  incomes  above  £200  a  year,  10 
per  cent.  In  both  cases,  the  excess  of  income  over  £400  and 
£200  is  only  chargeable  to  the  higher  rate.  These  taxes  are  not 
indeed  without  precedent.  In  1382,  the  "landowners  "  put  a  tax 
on  themselves  only  on  the  plea  •♦  of  the  poverty  of  the  country  ; " 
and  in  1404  a  special  tax  of  5  per  cent,  was  granted  by  the  lords 
temporal,  for  themselves,  their  ladies,  and  others  who  had  over 
500  marks  a  year.  In  the  reign  of  Henry  VIII.,  income  taxes 
levied  on  earnings  were  imposed.  These  were  disappomting,  for 
the  taxes  yielded  less  than  a  third  of  what  was  expected,  and  in  the 
next  year,  when  the  tax  was  reimposed,  it  was  even  more  unfruitful. 
I  have  found  no  further  attempt  to  impose  a  general  income  tax 
till  the  time  of  the  younger  Pitt. 

It  is  clear  that  the  financiers  of  the  fifteenth  century  consciously, 
but  by  a  just  instinct,  had  adopted  that  principle  in  practice,  which 


THE  INCOME  TAXES  OF  1435  AND  1450.  131 

Turgot  and  Adam  Smith  formulated  in  the  first  of  the  received 
canons  of  taxation.  There  was  an  apology  for  Pitt's  income  tax, 
in  the  desperate  straits  to  which  this  person  was  reduced  in  1799. 
In  his  plan  the  tax  of  10  per  cent,  was  levied  on  incomes  of 
£200  a  year  and  upwards  and  varying  rates  on  incomes  below 
£200  up  to  £60.  I  cannot  but  think  that  he  had  in  his  mind 
Tresham's  budget  of  1450.  Addington,  who  repealed  Pitt's  income 
tax  during  the  short  peace  of  Amiens,  re-imposed  it  within  a  year, 
and  did  away  with  the  graduated  character  of  it.  It  was  abolished 
impatiently  at  the  end  of  the  war,  with  ignorant  impatience,  as  the 
financiers  who  Hked  the  impost  said.  In  1842  it  was  reimposed 
by  Peel,  and  as  a  condition  to  those  fiscal  reforms,  which  have  in 
themselves  enormously  increased  the  revenue,  and  has  continued 
ever  since.  At  present,  as  I  pointed  out  in  a  motion  on  direct 
taxation,  which  I  carried  by  a  substantial  majority  on  March  23, 
1886,  nearly  half  the  receipts  of  the  income  tax  are  appropriated  to 
relieve  landowners  from  the  ancient  and  traditional  habilities  which 
were  chargeable  directly  or  indirectly  on  their  estates,  the  outlay  on 
which  is  essential,  in  order  that  these  estates  should  have  any 
economical  value  whatever.  The  contribution  of  these  taxes  in 
relief  of  landowners  is  about  as  just  as  it  would  be  to  levy  a  tax 
from  the  public  in  order  to  manure  or  drain  a  landowner's  fields. 

Peel's  plea  for  reimposing  this  detestable  and  intrinsically 
iniquitous  tax,  as  formulated  by  Mr.  Gladstone,  was  to  the  effect 
that  the  remission  of  taxation  conceded  in  1842  and  onwards  was 
a  saving  to  the  taxpayer,  and  should  therefore  be  met  with  a 
corresponding  sacrifice  on.  the  part  of  those  whose  spending  income 
was  increased  by  the  remissions.  But,  in  the  first  place.  Peel's 
principal  remissions,  omitting  a  host  of  grotesque  customs  duties 
which  produced  next  to  nothing,  were  oi  excises  on  domestic  manu- 
factures— the  effect  of  which  was  exceedingly  injurious  to  workmen 
and  employers,  but  the  remission  of  which  was  an  almost  un- 
appreciable  benefit  to  consumers.  Besides,  the  customs  and  excise 
on  articles  generally  consumed  was  for  a  long  time  hardly  reduced, 
was  even  heightened  on  some  so-called  luxuries,  and  the  rapid 
increase  of  revenue,  while  it  made  up  for  all  anticipated  loss  on 
the  remission,  is  a  sufficient  answer  to  the  plea  on  which  the  tax 
was  imposed.     To  have  permanently  justified  it,  it  was  necessary 


132     THE  CHABACTER  OF  EABLY  TAXATION. 

to  show  that  it  really  was  no  bar  to  the  increase  of  income,  and 
there  is  camulative  and  unfortunately  increasing  evidence  that  no 
such  proof  can  be  alleged.  It  is  no  doubt  a  particularly  easy 
expedient  in  the  hands  of  a  stupid  financier,  who  is  able,  without 
intelligence  or  even  thought,  to  oppress  with  ease  the  most  helpless 
class  in  the  country,  those  who  live  on  precarious  incomes,  and 
have  no  opportunity  whatever,  as  traders  have,  of  transferring  the 
tax  from  themselves  to  others,  their  customers. 

The  house  of  York  made  application  to  Parliament  for  very  few 
grants.  The  malignant  sycophants,  who  wrote  under  the  Tudor 
sovereigns,  tried  to  blacken  Edward's  character,  and  shallow 
historians,  who  repeat  commonplaces,  have  made  Edward 
rapacious,  sensual,  and  cruel.  I  can  only  say  that  the  rolls  of 
Parliament,  during  his  reign,  are  full  of  petitions  from  Lancastrian 
nobles  and  gentry,  praying  for  the  removal  of  their  attainders,  and 
that  the  prayer  is  always  granted,  though  not  a  few  of  these 
suppliants  deserted  and  made  war  on  him  in  1470-1.  It  is  true 
that  he  invented  a  new  impost,  and  perhaps  a  disagreeable  one, 
in  the  extension,  I  can  hardly  say  the  invention,  of  benevolences. 
No  doubt,  though  these  were  nominally  loans,  they  were  virtually 
gifts,  which  the  fashion  of  the  age,  and  the  fashion  of  two  centuries 
later,  did  not  make  it  sordid  for  the  king  and  his  ministers  to 
follow.  Benevolences  were  really  special  income  taxes  on  wealthy 
persons,  and  the  principle  of  them  was  exactly  followed  in  the 
earliest  poor  laws,  till  it  was  found  that  free  giving  was  less  pro- 
ductive than  compulsion.  As  I  have  said  already,  the  fifteenth 
century  was  famiUar  with  the  prniciple  of  graduated  property 
taxes.  Kichard  III.  abandoned  the  practice  of  benevolences. 
Henry  VII.  revived  the  practice,  and  by  11  Henry  VII.  cap.  10 
made  the  promise  a  recoverable  liability. 

The  origin  of  the  custom,  now  part  of  settled  constitutional 
usage,  under  which  money  grants  originate  in  the  House  of 
Commons  only,  a  practice  which  has  been  adopted  in  all  civiHzed 
communities,  even  when  the  Upper  House  is  el-ective,  is  exceedingly 
obscure.  It  was  not  finally  settled  in  England  till  the  time  of  the 
Pensionary  Parliament,  and  then  was  the  result  of  a  drawn  battle 
between  the  Lords  and  Commons,  under  which  the  Lords  re- 
tained  their    appellate  jurisdiction,   and  gave  judgments   which 


GBANTS  BY  THE  COMMONS.    ORIGIN  OF  THE  CUSTOM.  133 

excited  the  wonder  and  contempt  of  the  lawyers,  who  refused  to 
report,  or  be  bound  by  these  precedents,  and  the  Commons  were 
admitted  sub  silentio  to  have  the  sole  right  of  originating  and 
altering  money  bills,  though  the  Lords,  a  very  questionable 
usurpation,  claimed  the  right  of  rejecting  them.  I  will  venture  to 
put  before  you  my  interpretation  of  the  custom.  It  seems  to  me 
to  be  the  inevitable  outcome  of  the  constitution  of  the  two  Houses. 
It  is  almost  needless  to  say  that  the  circumstances  do  not  apply 
to  modem  legislative  assemblies,  between  which  and  the  two 
English  houses,  there  is  only  an  external  resemblance. 

The  old  House  of  Lords,  I  speak  of  that  which  sat  before  the 
Reformation,  and  even  for  nearly  a  century  after  that  event,  was 
a  very  shifting  and  uncertain  body.  In  theory,  it  was  the  king's 
council,  his  advisers,  whose  presence  he  could  claim  at  his 
pleasure  as  their  duty,  whose  absence  or  neglect  he  could  and  did 
construe  as  disaffection,  or  even  rebellion.  So  intrinsic  was  this 
doctrine  to  the  constitution  of  the  Lords,  that  Henry  VIII.,  who 
had  his  own  reasons  for  compelling  the  attendances  of  all  whom 
he  wished  to  keep  in  hand,  invented  the  system  of  proxies,  which 
was  originally  a  guarantee  of  each  by  some  of  his  own  order, 
temporal  peers  by  temporal,  spiritual  by  spiritual  peers.  Then 
the  summons  to  sit  was  issued  irregularly  and  capriciously.  In 
the  Plantagenet  period,  the  composition  of  no  two  sessions  is  alike, 
and  glad  enough  was  a  peer  who  escaped  a  writ  of  summons.  The 
spiiitual  peers  too  far  exceeded  the  possible  temporal  peers,  and 
they  were  taxed  in  a  different  house,  and  on  different  principles. 
It  was  only  till  the  time  of  Charles  I.  that  the  peers  claimed  a 
writ  of  summons  as  of  right,  or  rather,  in  the  cases  of  Arundel  and 
Bristol,  the  liberation  of  two  of  their  number  from  prison.  Charles, 
who  had  no  mind  to  quarrel  with  both  houses  at  once,  tacitly 
conceded  their  claim  to  a  writ.  Now  in  this  assembly  the  king 
was  always  supposed  to  be  present,  and  very  often  actually  was. 
Could  so  incongruous,  shifting,  incompetent  an  assembly,  where 
two-thirds  of  the  sitting  members  could  have  no  judgment  in  the 
taxing  of  laymen,  and  all  would  find  the  discussion  of  the  king's 
necessities  intolerable  in  his  presence,  undertake  money  bills? 
And  if  they  did,  with  what  colour  could  the  consent  of  the  tax- 
payer be  alleged  for  their  schemes  ? 


134  THE  CHABACTEB  OF  EABLY  TAXATION. 

The  Commons,  on  the  other  hand>  were  from  the  first  summoned 
to  make  grants.  They  were  the  delegates  of  the  towns  and 
counties  who  sent  them,  were  instructed  by  their  constituents 
before  they  went,  were  instructed  by  their  constituents  while  they 
sat.  As  they  were  representative  of  their  constituents,  so  their 
elected  Speaker  was  representative  of  them.  He  it  was  who  drew 
up  the  budgets,  to  use  a  modem  phrase,  and  announced  the  grants. 
His  address  to  the  Crown  on  his  election,  in  which  he  deprecates 
ofifence,  and  as  the  mouthpiece  of  the  Commons,  begs  for  the 
most  favourable  construction  of  his  words  and  acts,  is  a  ceremonial 
survival,  now  grotesque  and  out  of  place,  of  a  period  when  those 
words  meant  a  good  deal.  Besides  they  alone,  who  were  com- 
missioned to  give  or  withhold,  could  make  a  binding  promise. 
Of  course,  if  the  Lords  resolved,  of  their  own  motion,  to  levy  a  tax 
on  their  own  Order,  as  they  did  in  1404,  who  could  say  them  nay  7 
I  imagine  that  even  now,  if  the  Lords  resolved  on  paying  a  triple 
income  tax,  which  is  very  unlikely,  and  paid  it,  which  is  still  more 
improbable,  the  House  of  Commons  would  hardly  interpose  its 
constitutional  veto.  Grants  originated  in  the  House  of  Commons 
because  it  is  inconceivable  that  they  could  have  originated  any- 
where else.  The  confirmation  of  Parliament  of  grants  by  Convo- 
cation, and  the  admitted  illegality  of  the  grant  without  assent  of 
Parliament,  is,  I  am  sure,  a  disguised  usurpation,  for  which  a  very 
plausible  but  not  very  agreeable  reabon  was  found,  though  not 
always  expressed. 

There  are  two  taxes  of  curious  significance,  exceedingly  interesting 
for  a  reason  which  I  shall  give  in  my  next  lecture,  but  presenting 
features  on  which  I  may  make  a  brief  comment  here,  for  I  am  deal- 
ing, as  you  will  remember,  with  early  taxation  only.  These  are  the 
special  grant  in  1453,  never  indeed  paid  for  reasons  which  will  be 
seen,  and  demanded  mider  similar  conditions  which  were  never  satis- 
fied in  1472  ;  and  the  special  grant  of  1^03,  which  Henry  was  not 
likely  to  forego,  and  indeed  was  calculated  with  scrupulous  anxiety, 
for  he  got,  no  doubt,  to  his  great  delight,  a  few  pounds  more  than 
was  given  him. 

Li  1450,  Guienne  was  lost,  Cade's  rebellion  broke  out,  and  the 
Parliament  which  was  sitting  at  Coventry  was  dispersed  in  disorder. 
In  1452,  it  seemed  that  Guienne  could  be  recovered,  for  the  Gascons, 


THE  OBANTS  OF  1453  AND  1503.  186 

irritated  at  arbitrary  taxation,  had  revolted,  and  old  Shrewsbury 
was  dispatched  with  a  force  to  aid  them.  The  Commons  caught  at 
the  chance,  and  gave  by  vote  a  force  of  20,000  archers  (the  king's 
advisers  accepting  18,000  only)  to  be  paid  by  a  levy  on  each  county, 
the  contingent  of  each  county  being  settled  by  Parliament,  with 
wages  of  sixpence  a  day,  the  full  day's  pay  of  an  artisan.  The  grant 
was  made  in  vain,  for,  before  it  could  be  raised,  Shrewsbury  and 
his  son  were  defeated  and  slain  before  Chatillon,  and  the  war  was 
suddenly  at  an  end.  This  tax  was  to  be  levied  on  the  supposed 
capacity  of  all  the  counties  and  some  of  the  towns,  all  the  counties 
except  Chester  being  rated.  In  1472,  Edward  had  resolved  to  invade 
France,  the  protection  and  assistance  given  to  Margaret  being  the 
plea,  and  Parliament  renewed  the  grant  of  nineteen  years  before. 
Now  this  tax  lor  the  levy  and  support  of  an  army  was  undoubtedly 
inforced  on  all  the  lay  population. 

The  tax  of  1503  was  a  still  more  marked  departure  from  ancient 
usage.  In  this  year  Henry,  who  neglected  no  means  of  raising 
money,  determined  on  reviving  two  ancient  aids,  those  payable  by 
feudal  custom  by  all  tenants  in  knight  service  on  the  occasion  of  the 
knighting  of  the  king's  eldest  son,  and  the  marriage  of  the  king's 
eldest  daughter.  Margaret,  to  be  sure,  had  been  married  to  James 
IV.,  of  Scotland,  some  time  before,  and  Arthur  was  recently  dead. 
No  kiag's  eldest  son  had  been  knighted  during  his  father's  lifetime 
since  the  time  of  the  Black  Prince,  more  than  a  century  and  a  half 
ago,  and  Henry  IV.,  whose  eldest  daughter  married  the  Duke  of 
Bavaria,  made  no  claim  on  that  occasion.  But  the  bereaved  father 
determined  to  console  himself  by  taxing  his  subjects.  Now  the  only 
persons  Uable  to  this  aid  were  the  military  tenants.  With  the  con- 
sent of  Parliament  it  was  imposed  on  all,  tenants  in  chivalry, 
socagers,  and  copyholders  alike,  and  the  king  who  asked  for  £30,000, 
got  £1,006  4s.  7d.,  more  than  was  promised  him. 

With  the  growth  of  English  trade  the  customs  began  to  iacrease. 
They  were  treated,  though  an  ancient  source  of  royal  revenue,  as  a 
parhamentary  grant,  and  were  always  given  for  the  sovereign's  life 
in  his  first  Parliament.  Elizabeth  put  out  a  new  book  of  rates,  in 
which  the  percentages  were  levied  en  the  new  values  or  prices 
which  characterized  the  greater  part  of  her  reign.  The  new  book 
of  ratqs  which  James  put  out  at  Cecil's  instigation,  or  with  his  con- 


136  THE  CHABACIEB  OF  EABLY  TAXATION, 

nivance,  varied  the  amount  levied  as  well  as  readjusted  them  to 
prices.  With  this  action  began 'the  quarrel,  so  well  known  to 
historians,  which  ended  at  "Whitehall  nearly  forty  years  afterwards. 
It  was  a  singular  House,  that  of  Cecil  in  the  seventeenth  century. 
The  first  Lord  Salisbury  instigated  the  war  between  king  and  Par- 
liament ;  the  next  was  a  regicide  in  fact,  for  he  sat  in  the  Lords  on 
the  memorable  80th  of  January ;  the  third  was  a  Papist,  and  abetted 
some  of  the  worst  acts  and  purposes  of  James  II.,  was  committed 
to  the  Tower  and  only  saved  by  the  clemency  of  William,  after  the 
Eevolution.     The  elder  branch  became  and  remained  obscure. 

Ship  money  was  levied  on  all  the  counties  for  five  years,  begin- 
ning with  1636.  The  assessment  was  laboriously  equitable,  whatever 
may  be  said  about  the  legality  of  the  tax,  about  which  I  presume  all 
historians,  even  those  of  the  modem  or  apologetic  school,  are  agreed. 
It  is  well  known  that  the  impost  was  due  to  a  suggestion  of  At- 
torney-General Noy,  who,  fortunately  for  himself,  a  renegade  and 
tool,  died  before  the  tax  was  actually  put  into  operation.  It  is  said 
that  Noy  discovered  precedents  in  the  Tower  records.  Of  course 
maritime  towns  and  counties  were  bound  to  the  defence  of  the  sea. 
The  privileges  of  the  Cinque  Ports  were  based  on  this  service.  Mer- 
cantile vessels  could  be  pressed  for  the  service  of  war ;  Edward  III. 
made  such  a  requisition  before  the  victory  of  Sluys  and  the  invasion 
of  France.  But  it  was  generally  beheved  that  the  extension  of  the 
tax  to  the  inland  counties  was  an  after- thought,  for  which  no  prece- 
dent could  be  alleged.  But  I  have  seen  traces  of  the  practice  in  the 
fourteenth  century.  I  have  found  a  few  examples  where  estates  in 
the  inland  counties  have  been  taxed  pro  war  da  maris,  and  this  im- 
post can  hardly  be  distinguished,  except  by  the  systematic  adoption 
of  it,  from  Noy's  famous  expedient. 

The  great  struggle  of  1642  had  to  be  waged  at  first  with  the  old 
finance.  Parhament  had  from  the  beginning  an  enormous  advantage. 
London,  which  had  more  than  half  of  the  available  wealth  of  the 
country,  that  which  could  be  drawn  on  for  war,  was  resolutely  and 
undisguisedly  on  the  side  of  Parliament,  and  at  first  the  supplies 
came  almost  exclusively  from  London.  Against  this,  the  plate  of 
the  malign  ants  (the  roundheads  in  derision  called  the  proceeds 
thimble  money)  was  of  little  avail.  But  for  some  time  only  the 
seven  associated  eastern  counties  were  unreservedly  on  the  side  of 


THE  GBOWTH  OF  THE  CUSTOMS,    SHIP  MONEY.      137 

Parliament,  though  Charles  could  hardly  be  said  to  have  had  a 
single  county  unanimously  on  his  side.  The  urgency  of  a  new 
finance  was  manifest.  The  records  of  the  war  of  independence  in 
Holland  supplied  a  precedent  and  a  pretext,  and  from  this  repertory 
Parliament  borrowed  the  excise.  It  was  searching,  general,  and 
lucrative.  The  method  consisted  in  levying  a  tax  on  the  purchaser 
at  the  time  of  his  buying  any  excisable  article,  and  making  the 
vendor  responsible  for  collecting  it.  It  was,  in  short,  a  wide  octroi 
duty,  levied  at  all  times  and  places.  The  king  and  the  Cavaliers 
denounced  it  as  an  unheard-of  tyranny,  and  speedily  adopted  it 
themselves  wherever  they  could  collect  it.  It  was  denounced  at  the 
Eestoration,  and  made  hereditary  in  order  to  enable  the  great  land- 
owners to  emancipate  their  estates  from  feudal  dues  at  the  expense 
of  the  general  pubUc. 

With  the  excise  comes  the  epoch  of  modem  finance.  Some  of 
the  old  expedients  continued  up  to  the  Eevolution  and  even  after  it. 
In  one  case  the  principle  of  the  old  taxation  was  continued.  The 
land  tax  of  our  own  day  is  paid  on  the  valuation  of  near  two 
centuries  ago.  But  the  equity  of  this  valuation  is  very  often 
adversely  criticized,  and  a  revision  of  it  is  frequently  demanded. 


THE  DISTRIBUTION  OF  WEALTH  IN  ENGLAND  AT 
DIFFERENT  EPOCHS. 

The  importance  of  this  subject  in  following  the  progress  of  the  nation 
in  wealth  and  population — Modern  estimates  of  local  wealth — 
Self-government  in  the  village — The  magnitude  of  the  churches, 
and  the  true  inference  from  the  fact — The  richest  and  poorest 
counties — Assessments  in  1341,  1375,  1453,  1503 — The  wealth  of 
Norfolk  and  Oxfordshire — The  relative  wealth  of  the  towns — 
Assessments  in  the  seventeenth  century — The  valuations  of  1660 
and  1672 — The  population  of  England  and  Wales — Homes  and 
hearths  in  1690 — The  progress  of  Northern  England. 

There  is  hardly  any  topic  more  interesting  to  the  student  of  the 
economic  history  of  England,  than  that  of  the  distribution  of  its 
wealth  at  different  epochs  in  its  political  and  social  Hfe.  There  are  in- 
deed few  questions  which  are  more  obscure,  none  in  which  positive 
information  on  which  the  student  can  rely  is  more  scanty  and  broken. 
I  have  been  engaged  in  the  search  after  matter  of  this  kind  for  a 
good  deal  over  a  quarter  of  a  century,  and  though  I  can,  in  what  I 
have  collected,  throw  a  considerable  amount  of  light  on  certain 
epochs  in  history,  there  are  long  intervals  of  extreme  obscurity, 
during  which  I  have  vainly  sought  in  printed  volumes  and  in 
manuscripts  for  the  requisite  evidence.  For  example,  I  have  found 
nothing  trustworthy  on  which  I  can  depend  during  the  long  and 
eventful  period  which  begins  with  the  reign  of  Henry  VIII.  and  con- 
cludes with  the  events  which  immediately  preceded  the  civil  war  of 
1642.  I  have  a  strong  distaste,  which  I  wish  was  more  general 
among  historians,  for  those  vague  declarations  as  to  social  conditions 


IMPOBTANCE  OF  THE  SUBJECT,  189 

which  one  reads  of  among  contemporary  historians,  from  monks 
like  Matthew  Paris,  to  historians  Uke  Clarendon,  who  were,  after  all, 
unable  to  supply  one  with  any  evidence  on  which  to  test  their  state- 
ments. Clarendon,  for  example,  speaks  of  the  growing  economical 
prosperity  which  intervened  during  the  eleven  years  in  which  all 
parliamentary  action  was  suspended.  I  am  convinced  from  the 
comparison  which  I  have  been  able  to  make  between  wages,  rents, 
and  prices,  that  it  was  a  period  of  excessive  misery  among  the  mass 
of  the  people  and  the  tenants,  a  time  in  which  a  few  might  have 
become  rich,  while  the  many  were  crushed  down  into  hopeless  and 
almost  permanent  indigence,  an  age  in  which  the  sufferings  of  the 
Enghsh  nation  were  greater  than  they  ever  were,  except  during  the 
time  of  the  great  Continental  war. 

If  we  could  arrive  at  precise  information  about  the  distribution  of 
wealth  in  England  at  different  epochs  of  history,  we  should  be  in- 
formed as  to  how  those  industries  which  make  wealth  are  developed, 
and  the  extent  to  which  homebred  or  imported  intelligence  was  able 
to  avail  itself  of  the  opportunities  which  the  natural  products  of  the 
country  offered,  of  the  advantages  which  the  climate  afforded,  and 
of  the  skill  with  which  the  English  people  were  able  to  utilize  the 
results  of  their  agriculture,  and  the  wealth  of  their  minerals.  We 
should  be  able  to  define  the  localities  of  industry,  and  interpret' 
the  ease  or  difficulty  with  which  manufactures  spread  from  their  first 
home  into  other  parts  of  the  island.  We  should  know,  in  part  at 
least,  what  were  the  hindrances  to  the  development  of  what  in  our 
modem  experience  has  been  so  abundantly  exhibited,  and  should, 
for  example,  be  able  to  learn  what  was  the  efficiency  of  government 
for  internal  police  and  for  external  defence  ;  and  in  particular  be 
able  to  trace  the  effects  of  legislation  on  the  industry  which  it  pro- 
fessedly strove  to  foster,  and  the  material  prosperity  which  it  was 
certainly  anxious  to  promote.  And  lastly,  if  we  knew  the  distribu- 
tion of  wealth,  we  should  be  able  to  make  a  reasonable  estimate  as 
to  the  amount  of  population  in  England  at  different  periods  of  its 
history,  and  even  to  conclude  as  to  its  distribution  over  the  country. 
I  shall  indeed,  in  the  course  of  this  lecture,  exhibit  and  comment  on 
such  evidence  as  1  have  been  able  to  discover,  and  I  shall,  I  trust,  be 
able  to  show  some  substantial  results  on  the  topic  which  I  have 
taken  for  this  day's  lecture. 


140    TEE  DISTBIBUTION  OF  WEALTH  IN  ENGLAND. 

Even  at  the  present  time,  when  statistical  information  is  so 
abundant  as  to  be  overwhelming  by  its  magnitude,  it  is  by  no  means 
easy  to  expound  the  present  distribution  of  wealth.  We  have 
decennial  returns,  from  the  commencement  of  the  present  century, 
of  the  population  contained  in  the  United  Kingdom.  But  these 
returns,  even  when  tabulated,  are  of  little  use  in  determining  the 
relative  prosperity  or  decay  of  particular  districts.  We  should 
generally  conclude,  that  if  population  is  lessening  in  any  locality, 
the  relative  importance  of  the  district  was  declining,  or  if  the  num- 
ber of  the  inhabitants  was  increasing,  that  its  industrial  activity 
was  increasing  also.  But,  unfortunately,  even  this  test  is  an  un- 
certain. Districts  may  have  a  congested,  and  thereupon  an 
impoverished,  population,  where  a  diminishing  return  may  imply  a 
real  progress.  An  increasing  population  may  not  necessarily  imply 
an  improving  social  condition,  or  the  growth  of  a  race  which  is  to 
be  successful  in  the  economical  competition  of  the  world.  Near  our 
own  shores  we  have  had  an  experience  of  a  race  which  grew  in 
numbers  indeed,  but  has  sunk  in  misery ;  how  caused,  this  is  not  the 
place  or  time  to  inquire  We  may  have  population  increase,  and 
industry  be  arrested,  or  at  least  carried  on  under  apparently  un- 
favourable conditions.  The  investigation  of  such  social  and  economical 
problems  as  are  before  us,  even  when  the  facts  are,  to  all  appear- 
ances supplied,  is  full  of  difficulty,  full  of  controversy,  is  often  made 
more  obscure  by  prejudice  and  passion. 

The  two  most  trustworthy  elements  in  the  calculation  of  the 
question — in  what  manner  is  wealth  distributed  in  England  at 
present — are  the  rateable  value  of  property,  and  the  income  tax 
returns  when  digested  and  formulated.  But  neither  of  these  aids 
can  be  safely  relied  on.  The  principles  on  which  property  is  rated 
are  neither  satisfactory  nor  uniform.  The  legislature  has  conferred 
all  final  authority  in  rating,  even  in  the  case  of  property  in  cities 
and  towns  on  the  county  magistrates,  and  the  grossest  partiality  has 
followed.  Vast  mansions  are  valued  at  a  nominal  yearly  rent,  on 
the  plea  that  such  mansions  have  little  or  no  letting  value,  the  test 
suggested  by  the  Eating  Act  of  William  IV.,  and  therefore  these 
valuations,  as  far  as  they  go,  are  no  test.  Then  in  some  places,  aU 
property  is  valued  at  close  upon  its  gross  rental,  and  in  some  other 
places  at  much  less  than  its  gross  rental.     Some  kinds  of  property 


MODERN  ESTIMATES  OF  LOCAL  WEALTH,  141 

pay  an  indirect  rent,  because  the  lessor  of  the  property  has  a 
monopoly  of  supply  to  it,  and  therefore  can  obtain  a  far  greater 
profit  from  the  occupant  than  his  rent  suggests.  Such  kinds  of 
property  again  disturb  one's  estimates  as  to  the  distribution  of 
wealth,  because  for  rating  purposes  every  effort  is  made  to  under- 
value them. 

Again,  the  income  tax  returns,  when  digested  into  the  several 
counties,  give  us  in  modem  times  some  idea  as  to  how  wealth  is 
distributed  in  England.  But  setting  aside  the  obvious  anomalies  of 
this  impost,  particularly  those  of  the  farmer's  schedule,  the  return 
of  income,  if  it  be  taxed  at  the  place  of  receipt,  when  the  place  of 
receipt  is  not  the  same  as  that  in  which  the  income  is  earned,  is 
misleading.  A  man  derives  a  large  profit  from  a  factory,  or  from 
productive  works  in  one  county,  and  receives  his  profits  in  another. 
The  distribution  by  counties  gives  an  erroneous  idea  as  to  the  dis- 
tribution of  productive  industry.  This  ambiguity  is  heightened  in 
the  case  of  those  locaHties  where  the  spending  class  is  more  nume- 
rous than  the  productive  class,  as  is  the  case  with  London  and  many 
other  towns  :  still  more  markedly,  where  people  who  have  ceased  to 
be  producers,  or  never  have  been,  and  are  to  a  great  extent,  not  even 
traders,  but  live  on  income.  The  population  of  Yorkshire  or 
Lancashire  probably  represents  a  larger  production  of  wealth  than 
that  of  Middlesex  or  Surrey  does,  and  yet  in  the  interpretation  of  the 
problem  before  us,  as  to  the  distribution  of  wealth  in  England,  ap- 
pears to  denote  a  lower  average  of  industry  than  the  district  in 
which  income  accumulated  from  savings  is  spent.  It  is  exceedingly 
difficult  then,  from  the  statistician's  point  of  view,  to  decide  from 
any  figures  set  before  one,  how  to  interpret  the  distribution  of  Eng- 
Hsh  wealth,  even  in  our  own  day. 

The  difficulty  was  less  in  antiquity,  but,  unfortunately,  we  are 
not  in  possession  of  information,  except  as  I  shall  show  inferentially. 
There  is  indeed  one  ancient  document,  not  quite  exhaustive,  but  for 
all,  as  far  as  it  goes,  copious  and  accurate,  in  which  an  account  of 
English  society  is  given  from  the  point  of  view  which  I  am  at  pre- 
sent considering.  Domesday  purports  to  give  a  complete  statement, 
for  the  region  which  it  surveys,  of  the  property  which  it  registers. 
It  is  mtended  to  state  with  minuteness  what  were  the  resources  of 
every  lordship,  parish,  and  manor,  the  owners  and  inhabitants,  with. 


142    THE  DISTBIBUTION  OF  WEALTH  IN  ENGLAND. 

the  civil  status  of  all  those  whom  it  enumerates  and  describea 
The  survey  is  not  only  particular,  but  unique.  I  do  not  remember 
that  its  parallel  exists  in  the  archives  of  any  country,  and  it  was  the 
first  and  last  effort  of  the  kind  in  England.  It  is  the  more  interest- 
ing and  remarkable,  because  it  contrasts  England  at  the  end  of  the 
eleventh  century,  with  England  in  the  middle  of  the  same  century 
to  the  no  small  advantage  of  the  latter,  in  what  seemed  to  be  the 
good  old  times,  those  of  Edward  the  Confessor.  But  Domesday  Book 
has  never  been  analysed  from  the  statistician's  point  of  view,  and 
especially  from  that  before  me,  the  distribution  of  wealth  in  England 
during  those  wild  archaic  times. 

Of  course,  when  the  elements  of  society  were  far  fewer,  and  the 
relations  of  the  people  to  each  other  were  far  more  direct,  the 
solution  of  the  problem  would  be,  in  the  presence  of  the  requisite 
information,  far  more  easy  than  it  is  now.  The  circle  in  which  the 
peasants  and  burghers  lived  was  narrow.  In  his  parish  or  manor  the 
former  was  at  home  among  his  comrades,  who  Hved  under  a  system 
of  reciprocal  responsibility,  and  a  sufficiently  active  administration 
of  customary  law.  Everywhere  else  he  was  a  stranger,  except  for 
his  occasional  participation  in  the  action  of  the  hundred  and  the 
County  Court.  There  was  on  the  boundaries  of  nearly  every  village 
a  tract  of  no-man's  land,  sometimes  a  tract  of  great  extent,  in  which 
landless  men  lived.  The  traditions  of  outlaws  living  in  the  forest 
and  maintaining  themselves  by  poaching  and  plunder,  amenable  if 
they  were  captured,  to  an  infinitely  more  severe  law  than  that  which 
prevailed  in  the  settled  villages,  and  irom  whose  depredations  the 
villagers  were  secure,  are  not  only  presented  to  us  in  ballads,  but  in 
sober  narratives.  Such,  for  example,  is  the  story  told  us  by  Matthew 
Paris  of  the  robbers  of  Alton,  in  Hampshire,  who  carried  on  their 
depredations  extensively  on  the  tract  of  forest  extending  through  the 
middle  of  Hampshire  to  Southampton, — raids  Henry  the  Third 
found  it  no  way  easy  to  put  down,  in  which  many  of  his  own  house- 
hold were  associated.  The  road  from  Southampton  was  the  principal 
highway  by  which  French  merchants  transmitted  their  goods,  and  I 
think  it  highly  probable  that  the  ancient  settlements  on  the  Hamp« 
shire  rivers,  though  they  did  not,  and  by  their  customary  law  could 
not,  harbour  the  malefactors,  were  very  indifferent  to  their  doings. 

Any  one  who  has  studied,  even  superficially,  the  records  of  Manor 


8ELF-G0VEBNMENT  IN  THE  VILLAGE,  143 

Courts  in  the  fourteenth  century,  when  the  ancient  jurisdiction  of 
the  Court  leet  with  its  grand  and  petty  jury  was  in  full  vigour,  will 
see  how  effective  and  how  full  of  reciprocal  checks  the  system  was. 
As  the  liing  appeared  in  his  own  courts  of  law  by  his  deputy  only, 
so  the  lord  of  the  manor  did  not  sit  in  judgment  himself,  but  by  his 
steward  or  seneschal.  Before  this  personage,  offenders  were  pre- 
sented, for  the  steward  could  take  no  official  notice  of  local  offences, 
except  the  offender  were  presented.  If  the  offence  was  very  grave, 
and  the  court  had  the  high  jurisdiction  a  jury  was  empanelled  to 
try  the  offence.  I  printed  myself,  many  years  ago,  an  example  of  a 
trial  for  a  capital  offence,  in  the  manor  of  Holywell,  the  conviction 
of  the  offender,  the  sentence  and  its  execution,  as  late  as  1337.  In 
this  case  the  felon  is  described  as  a  vagabond,  and  without  chattels 
of  his  own.  As  he  was  caught  red-hand  in  the  commission  of  the 
theft  for  which  he  was  executed,  the  injured  party  recovered  his  pro- 
perty. When  the  offence  was  proved,  the  steward  settled  the 
penalty,  the  fines  being  part  of  the  lord's  dues.  Now  if  the  official 
were  too  severe,  the  jurors  of  the  village  were  discouraged  from  pre- 
senting offenders,  and  the  lord's  revenue  suffered.  If  he  were  too 
lax,  which  was  not  likely,  as  he  had,  on  his  lord's  behalf,  a  pecu- 
niary interest  in  the  penalties,  the  discipline  of  the  manor  suffered. 
On  the  whole,  I  believe,  that  the  justice  of  the  old  Manor  Court  was 
more  effective  and  more  satisfactory  than  that  which  superseded  it, 
and  in  order  to  coerce  the  labourer  in  the  matter  of  wages  was  made 
very  effective,  the  justice  room  of  the  magistrate. 

In  these  villages,  as  I  have  already  stated,  the  principal  employ- 
ment of  the  people  was  agriculture.  There  were,  I  make  no  doubt,  j 
in  nearly  all  villages,  some  persons  who  either  added  another  calling 
to  that  of  husbandman,  though  few,  I  think,  were  without  land 
which  they  tiUed.  Such  were  especially  the  miUer  and  the  com- 
mon carrier,  the  latter  being  frequently  mentioned  as  well  as  the 
former  in  the  record  of  manorial  discipline,  the  former  generally 
presented  for  abusing  his  position,  the  latter  for  neghgence  or  fraud 
as  a  bailee.  I  take  it,  too,  that  the  spinning-wheel  was  found  in 
most  homesteads  high  and  low,  and  the  hand-loom  in  many.  The 
clothing  of  these  rustics  was,  as  a  rule,  homespun.  This  is  manifest 
from  the  invariable  assortment  of  wool  into  ordinary  merchantable 
wool,  and  locks,  the  latter  being  sold  at  cheap  rates  for  domestio 


144    THE  DISTBIBUTION  OF  WEALTH  IN  ENGLAND, 

manufacture.  In  early  times,  too,  it  was  customary  for  the  hus- 
bandman to  sow  small  plots  of  hemp  and  flax.  In  the  reign  of 
Henry  VIII.,  when  there  seemed  a  likelihood  of  this  kind  of  agri- 
culture going  out  of  fashion,  it  was  enforced  by  penalties.  But 
besides  this  domestic  manufacture,  spread  it  would  seem  over  the 
whole  island,  there  were  special  manufacturers  of  linen  and  woollen 
cloth.  The  original  home  of  this  was  Norfolk,  a  county  which  had 
early,  continuous,  and  close  relations  with  Flanders.  Not  a  few  of 
these  Flemings  emigrated  to  Norfolk  and  settled  there,  the  English 
kings  encouraging  them,  in  the  view  of  their  skill  as  weavers.  The 
Norfolk  weaving  was  carried  on  aU  over  the  county,  in  villages 
which  grew  into  towns,  though  they  never  obtained  the  advantages 
of  incorporation.  Indeed  it  appears  that  the  Norwich  guilds  exer- 
cised a  sort  of  jurisdiction  over  all  Norfolk  weaving,  wherever  it 
was  settled.  I  have  no  doubt  that  the  settlement  of  the  textile 
industries  in  Norfolk  was  due  to  the  geographical  position  in  which 
it  stood  to  Flanders.  It  was  not  otherwise  well  suited  to  the  weaving 
of  woollen  goods,  for  the  climate  is  the  driest  of  England,  and  suc- 
cessful woollen  weaving  needs  a  moist  atmosphere  and  an  equable 
temperature.  But  it  is  certain  that  the  density  of  the  population 
was,  for  the  time,  great  in  Norfolk.  There  is  stiU  a  memory  that 
towns  like  Aylsham  and  Cromer  were  far  larger  and  more  populous 
than  they  now  are,  that  they  owed  their  population  to  the  weaving 
trade,  and  their  waste  to  the  ravages  of  the  great  plague  of  1349. 
The  great  churches  of  Norfolk  were  often  pointed  to  as  a  proof,  in 
an  ill-informed  age,  that  population  in  mediaeval  England  must  have 
been  far  greater  than  was  generally  supposed.  But,  in  fact,  the 
church  of  the  parish  was,  at  least  as  far  as  the  nave  was  concerned, 
the  parish  hall,  where  meetings  were  held,  and  often  where  valuable 
agricultural  produce,  such  as  wool,  was  stored.  The  idea  that  a 
church  was  a  sacred  place,  in  which  after  Divine  service  was  over, 
no  business  was  to  be  transacted,  is  not  older  than  the  movement 
which  Laud  instigated.  Here  in  Oxford,  St.  Mary's  Church  was 
till  the  time  of  that  prelate,  the  convocation  house  of  the  University, 
in  which  academical  meetings  were  held,  decrees  conferred,  lectures 
given,  disputations  carried  on,  and  indeed  all  the  secular  business  of 
the  University  was  transacted. 

The  English  midland  counties,  the  eastern  counties,  and  one  of 


THE  RICHEST  AND  POOBEST  COUNTIES.  146 

the  southern,  Kent,  were  the  richest  parts  of  England.  They  con- 
tain the  largest  amount  of  natural  pasture  and  of  easily  worked  arable 
land.  The  western  counties,  the  counties  on  the  Welsh  marches, 
and  the  northern  were  the  poorest,  and  of  these,  as  a  rule,  and 
invariably  in  the  earHer  times,  Devon  and  Cornwall,  Yorkshire, 
especially  the  North  and  West  Ridings,  and  particularly  Lancashire, 
Westmoreland,  Northumberland,  and  Cumberland.  They  were 
naturally  backward  and  remained  backward,  the  poverty  of  the  district 
being  aggravated  by  the  incessant  wars  on  the  Scottish,  and  for  a 
while  on  the  Welsh,  border.  It  is  true  that  York  was  a  very  consider- 
able city,  occasionally  taking  second  rank  after  London.  But  the  rest 
of  England,  north  of  the  Humber,  was  backward,  scantily  peopled, 
and  insecure.  It  contained  rich  and  well-garrisoned  monasteries, 
and  fortified  castles.  But  the  towns  were  very  small.  Manchester  and 
Liverpool  were  really  no  bigger  than  fair-sized  villages.  The  West 
Riding  of  Yorkshire  was  little  else  besides  barren  moors  on  the 
hiUs,  and  sluggish  morasses  in  the  valleys.  In  order  to  check 
marauders,  short  and  sharp  justice  was  done,  of  which  the  Hahfax 
Maiden  is  a  specimen.  The  practices  of  those  rude  northern  men 
were  distasteful  to  their  southern  countrymen,  for  when,  after  Wake- 
field battle,  Margaret,  in  the  early  part  of  the  year  1461,  led  her 
army  from  the  north  into  the  South  of  England,  she  could  not  keep 
them  from  pillaging,  and  the  excesses  of  these  freebooters  rapidly 
brought  about  the  deposition  of  the  house  of  Lancaster.  As  late  as 
the  end  of  the  seventeenth  century,  it  is  said  that  the  northern 
counties  were  overlightly  taxed,  under  the  new  system  of  finance 
which  the  government  of  the  Revolution,  the  war  of  English  suc- 
cession, the  public  debt,  and  the  responsibility  of  Parliament 
made  necessary. 

The  principal,  perhaps  the  only,  source  from  which  one  may 
gather  information  as  to  the  distribution  of  wealth  in  England 
is  the  assessments  which  have  been  made  of  the  several  counties 
at  different  periods  of  English  history,  when  Parliament  accorded 
a  special  tax.  Direct  taxes,  especially  during  war,  and  under 
the  names  of  tenths  and  fifteenths  were  frequently  granted. 
But  the  tax  was  a  fixed  quantity,  which  was  not  altered,  except 
that  sometimes  a  remission  was  granted  to  certain  towns 
and   villages   which  had   suffered  from   some   great  calamity,  or 

11 


146     THE  DISTBIBUTION  OF  WEALTH  IN  ENGLAND, 

had  fallen  into  permanent  decay.  Hence,  however  accurate 
the  first  imposition  of  the  tax  was,  and  however  just  its  original 
distribution,  it  is  no  more,  as  time  goes  on,  significant  of  the 
condition  of  England  from  our  present  point  of  view,  than  the 
Land  Tax  of  1693,  which  has  similarly  remained  unaltered,  is  of 
the  distributed  wealth  of  modem  England.  The  occasions  on  which 
assessments  are  given,  which  do  indicate  such  a  distribution,  are 
comparatively  few ;  and  after  long  search,  continued  for  years,  I  have 
been  unable  to  find  a  valuation  for  the  latter  part  of  the  sixteenth 
and  the  first  quarter  of  the  seventeenth  century,  a  period  in  which 
great  economical  changes  occurred  in  England,  in  the  dissolution  of 
the  monasteries  and  the  consequent  changes  of  tenure  which  fol- 
lowed, and  in  the  influx  of  bullion  from  the  New  World.  I  have 
however  found  eleven  assessments  of  the  whole  or  nearly  the  whole 
country,  the  majority  of  them  having  been  taken  in  the  seventeenth 
century.  What  I  have  found  are  exceedingly  suggestive.  I  will 
state  in  detail  what  were  the  circumstances  under  which  the  grant 
was  conceded,  and  the  assessment  made. 

In  1341,  afew  years  before  the  Great  Plague  prodiiced  such  serious 
effects  on  Europe,  and  in  particular  on  England,  Qur  Edward  III., 
who  had  formulated  his  claim  to  the  French  thl-one,  against  the 
house  of  Valois,  applied  to  his  parliament  for  an  extraordinary 
grant,  and  Parliament  granted  him  a  subsidy  in  wool,  distributing 
the  tax  up  to  quarters  of  pounds,  over  the  several  counties,  two 
excepted,  Durham  and  Chester,  which  were  under  a  special  adminis- 
tration. Four  cities  or  towns  are  separately  assessed,  London, 
Newcastle-on-Tyne,  Bristol,  and  York,  and  their  quotas  are  in  the 
order  which  I  have  given.  From  numerous  entries  in  accounts  of 
the  time,  I  find  that  the  payment  was  not  necessarily  made  in  kind, 
but  was  constantly  paid  in  money,  the  roll  of  Parliament  from  which 
I  have  extracted  my  facts,  being  silent  as  to  the  value  to  be  assigned 
to  the  sack.  I  have  taken  the  average  price  of  wool  at  the  time, 
£4  the  sack,  and  shown  what  was  the  sum  of  money  under  this 
hypothesis  at  which  the  counties  are  severally  assessed.  This 
enables  me,  taking  the  present  average  of  the  counties,  to  indicate 
how  many  acres  in  each  county  go  to  a  pound  sterling  of  taxation, 
and  I  have  employed  the  same  process  in  all  the  other  assessments. 

In  1375,  when  the  Great  Plague  had  induced  all  the  social  and 


ASSESSMENTS  IN  1341,  1375,  1453,  1503,  147 

economical  effects  which  were  derived  from  it,  when  the  machinery 
which  WikUf  had  devised  was  in  full  operation,  and  the  peasants 
were  perfecting  that  organization  which  was  to  exhibit  its  formidable 
power  in  the  revolt  of  1381 ;  Edward,  now  sinking  into  premature 
decay,  and  having  lost  nearly  all  his  conquests,  and  even  his 
hereditary  possessions  in  Guienne,  appealed  to  his  Parliament  for 
an  extraordinary  grant.  Parliament  gave  him  a  fixed  sum  of 
money,  and,  as  before,  assessed  its  contribution  on  every  one  of  the 
counties,  and  on  five  cities  and  towns,  London,  Bristol,  York, 
Kingston-on-Hill,  and  Bath. 

In  1453,  after  the  loss  of  all  those  English  possessions  in  France, 
which  had  been  gained  by  the  second  war  of  succession,  the  Gascons 
had  revolted,  and  pledged  themselves  to  restore  the  English  king's 
authority  in  Aquitaine.  The  old  Earl  of  Shrewsbury  and  his  son 
were  sent  to  assist  them,  and  an  appeal  was  then  made  to  ParHa- 
ment.  The  Commons  determined  on  granting  a  considerable  army  of 
English  archers,  and  send  it  to  Talbot's  assistance.  They  agreed  to 
pay  these  archers  sixpence  a  day  for  six  months,  and  again  distributed 
the  number  of  archers  among  the  English  counties.  On  this  occa- 
sion they  assessed  Durham,  and  ten  cities  or  towns — London,  York, 
Norwich,  Bristol,  Coventry,  Newcastle-on-Tyne,  Hull,  Lincoln, 
Southampton,  and  Nottingham.  The  force  was  never  raised,  and 
the  tax  was  never  paid,  for  Talbot's  expedition  came  to  ruin  almost 
before  the  grant  was  even  made.  Nineteen  years  later,  the 
Commons  made  the  same  offer  to  Edward  IV.,  but  on  conditions 
which  also  were  never  fulfilled. 

In  1508  Henry  VII.  claimed  from  his  Parliament  the  payment  of 
the  ancient  aid  for  knighting  his  eldest  son,  and  marrying  his  eldest 
daughter.  This  aid  was  really  leviable  only  on  the  king's  tenants- 
in-chief;  but  it  had  not  been  claimed  for  more  than  a  century  and  a 
half,  and  I  have  not  found  that  it  was  claimed  after  1503,  during 
the  period  in  which  this  feudal  liability  continued.  Henry  claimed 
it  from  the  whole  nation,  and  a  fourth  assessment  was  made.  On  this 
occasion  seventeen  cities  or  towns  were  separately  assessed — London, 
Bristol,  York,  Lincoln,  Gloucester,  Norwich,  Shrewsbury,  Oxford, 
Salisbury,  Coventry,  Hull,  Canterbury,  Southampton,  Nottingham, 
Worcester,  Southwark,  and  Bath.  It  is  probable  that  in  this  assess- 
ment all  the  towns  which  were  deemed  considerable  enough  to  be 


148     THE  DISTBIBUTION  OF  WEALTH  IN  ENGLAND. 

specially  rated  were  taken,  and  that  in  this  list  we  practically  have 
all  the  larger  towns.  On  other  occasions  it  seems  that  those  only 
were  assessed  which  were  what  is  called  counties  of  towns,  that  is, 
towns  which  had  a  considerable  area  of  country  included  in  their 
bounds,  who  had  more  extensive  jurisdiction  than  other  corpora- 
tions possessed,  and  to  whom  the  justices  of  assize  had  a  special 
commission. 

Now  these  four  assessments  taken  before  the  Dissolution,  and  the 
fall  in  the  value  of  money,  indicate,  during  the  space  of  163  years, 
when  considerable  social  changes  had  taken  place,  what  was  the 
relative  wealth,  according  to  the  judgment  of  persons  interested  in 
acting  fairly,  of  the  several  English  counties  and  some  few  cities 
and  towns.  Of  course  it  does  not  follow  that  the  wealth  of  a 
county  was  materially  lessened  because  it  goes  down  in  the  list. 
It  may  be  that  the  resources  of  some  other  county  have  been  more 
extensively  developed  durmg  the  interval.  Again  there  are  occas- 
sional hints  given  us  as  to  the  falling  off  in  the  contingent  which 
the  several  localities  paid,  due  to  temporary,  perhaps  to  permanent, 
causes.  I  see  no  reason,  then,  why  we  should  not  entirely  rely  on 
these  estimates,  or  doubt  either  the  good  faith  or  capacity  of  those 
who  made  the  valuations.  It  will  be  expedient  to  deal  generally 
with  these  assessments,  and  then  to  point  out  what  particular  or 
noteworthy  facts  there  are  in  each. 

Of  course  the  assessment  of  Middlesex  with  London  is  greatly  in 
excess  of  that  imposed  on  any  other  county.  Without  London, 
Middlesex  does  not  occupy  a  very  high  place,  and  London  up  to  the 
middle  of  the  sixteenth  century  was  almost  entirely  confined  within 
its  ancient  walls,  where  it  had  a  considerable  nimiber  of  gardens 
and  open  spaces.  Indeed,  a  very  large  part  of  the  City  estate  of  our 
day  is  derived  from  spaces  now  built  over,  of  which  the  City  autho- 
rities possessed  the  freehold;  the  most  considerable  space  which  the 
City  possesses  to  the  west  of  London  having  been  a  grant  made  to 
them  for  establishing  reservoirs,  which  occupied  the  site  which  Hes 
just  west  of  St.  James's  Street.  The  population  of  London  was 
certainly  under  50,000  persons,  but  the  people  who  lived  in  London, 
and  carried  on  trade  and  manufactures  there,  were  far  more  wealthy 
than  the  merchants  and  craftsmen  of  other  cities.  "Without  London, 
Middlesex  ranges  from  the  third  to  the  ninth. 


THE  WEALTH  OF  NOBFOLK  AND  OXFOUDSHIBE.     149 

In  the  first  assessment,  Norfolk  has  the  second  place,  and  is 
separated  by  a  considerable  interval  from  the  next  county,  which  is 
that  of  Oxford.  But  in  the  second,  third,  and  fourth  Oxford  is 
second,  though  the  interval  between  the  two  counties  is  not  con- 
siderable. Now,  beyond  question,  the  supremacy  of  Norfolk  was 
due  to  her  local  manufactures,  in  which  the  county  remained 
superior  to  any  other  EngKsh  county  during  the  period  before  me. 
Norfolk  is  not,  agriculturally  speaking,  a  rich  county.  In  1860, 
under  Schedule  A  of  the  income  tax  it  stood  twenty-fifth  out  of 
thirty-seven  counties,  those,  namely,  which  were  valued  under  the 
assessment  of  1841.  In  our  day,  its  ancient  industry  has  almost 
entirely  migrated.  At  the  same  date  Oxford  was  seventeenth,  and 
if  we  exclude  the  two  manufacturing  and  trading  counties  from  the 
comparison,  the  seventh,  and  if  we  add  Kent,  which  is  greatly 
suburban,  and  not  a  little  manufacturing  and  trading,  sixth. 

The  explanation  of  the  position  occupied  by  Oxford  is  not  difficult. 
In  the  first  place,  it  had  but  Httle  waste  land  within  its  area,  com- 
pared with  many  other  counties.  In  the  next,  it  has  a  considerable 
amount  of  fertile  arable  land,  some  of  its  com  land  being  of 
remarkable  excellence.  But  the  true  explanation  of  its  early  agri- 
cultural wealth  is  in  the  large  amount  of  natural  pasture  it  possesses 
in  the  northern  and  north-western  part  of  the  county  from  the  city  of 
Oxford  onwards.  Now  pasture  in  the  Middle  Ages,  and  indeed  down 
to  the  time  when  winter  roots  and  artificial  grasses  were  generally 
cultivated,  bore  a  very  high  relative  rent.  In  the  period  before  us 
this  rent  was  between  eight  and  twelve  to  one  compared  with  arable. 
There  is  no  reason  to  believe  that  the  hay  crops  produced  in  the 
wide  stretches  of  pasture  on  the  Upper  Thames,  the  Evenlode,  the 
Windrush,  and  other  streams  of  North-west  Oxfordshire  were  less 
five  hundred  years  ago  than  they  are  now,  and  I  can  vouch  for  it, 
that  the  demand  for  pasture,  in  economical  language,  was  far  more 
urgent  than  it  is  in  recent  times.  The  next  five  counties  are  gene- 
rally Bedford,  Kent,  Berks,  Rutland,  and  Cambridge.  But  some- 
times Kent  falls  out  of  the  series,  and  the  place  is  taken  by 
Hunts. 

In  the  first  assessment  Lancashire  is  the  poorest  Enghsh  county, 
afterwards  Cumberland  occupies  that  place,  and  Lancashire  gets  up 
only  above  it  and  Northumberland.     The  assessment  of  the  West 


150    THE  DISTEIBVTION  OF  WEALTH  IN  ENGLAND, 

Eiding  of  York  is  also  very  low.  The  valuation  of  Oxfordshire  is 
about  ten  times  as  high,  acre  for  acre,  as  the  three  poor  counties 
are,  and  its  assessment  is  nearly  double  that  of  the  whole  West 
Eiding  of  York,  rather  more  than  half  the  area  of  the  whole  of  that 
great  county.  The  low  assessment  of  Stafford  shows  how  little  the 
mineral  resources  of  that  oounty  were  known  in  early  times. 
Devonshire,  too,  is  one  of  the  poorest  counties.  The  centres  of 
modern  English  opulence  were  then  wild  barren  regions,  inhabited 
by  a  rude  race.  The  Mersey  was  a  silent  estuary,  the  Irwell  a 
mountain  stream.  The  hills  and  valleys  of  the  West  Eiding,  now 
active  with  a  thousand  industries,  had  a  little  trade  in  cloth  at  Brad- 
ford and  Leeds,  and  a  rude  manufacture  of  steel  weapons  at 
Sheffield.  For  the  greater  part  of  that  which  is  produced  there 
now,  and  travels  over  the  known  world,  the  England  of  the 
fourteenth  and  fifteenth  centuries  depended  on  the  Baltic  provinces, 
Flanders,  and  Spain. 

In  1341,  the  contribution  of  London  to  the  wool  tax  was  less  than 
a  fourth  of  that  at  which  Norfolk  was  assessed.  In  1453  it  contri- 
buted more  than  Norfolk  to  the  charge  of  the  archers.  But  in  the 
first  half  of  the  fifteenth  century  the  city  of  London  made  remark- 
able progress.  The  •'  Libel  of  EngHsh  Policy  "  is  proof  as  to  how  its 
trade  had  grown,  the  relics,  still  surviving  from  the  Great  Fire,  of  the 
City  Companies'  archives  show  how  considerable  had  become, 
relatively  speaking,  the  wealth  of  the.  London  traders.  Most  of  these 
people  had,  it  is  true,  risen  from  comparative  poverty  to  wealth.  But 
Walworth  and  Whittington  in  the  fourteenth,  the  Chicheles  and  Can- 
nyngs  in  the  fifteenth,  are  illustrations  of  the  rapidity  with  which 
successful  trade  earned  wealth  in  those  early  times.  Li  1453  the  con- 
tribution of  London  is  three  times  that  of  Oxfordshire.  Li  1503  the 
contingent  of  Oxfordshire  is  nearly  twice  as  much  as  that  of  London. 
But  in  this  year  great  part  of  London  was  burned  to  the  ground,  a 
fact  which  shows  why  the  falling  off  took  place  and  that  the  assess- 
ment was  equitable.  London  and  Norfolk,  too,  were  very  severely 
visited  by  the  sweating  sickness.  Bristol  was  the  third  city  in 
1341,  the  second  in  1375,  the  fourth  in  1453,  and  the  second  again 
in  1503,  while  Norwich  falls  from  the  third  place  in  1453  to  the 
sixth  in  1503.  In  the  last  year  Gloucester  is  the  fifth  in  order, 
But  there  is  no  doubt  that  these  ports  of  the  Avon  and  Severn  were 


TEE  TOWNS  AND  THE  WEAVING  DISTRICTS,        151 

early  and  actively  engaged  in  the  trafiBc  with  Spain  and  Portugal, 
if  they  did  not  venture  on  following  up  Cabot's  discoveries  of  1497, 
he  having  sailed  from  Bristol  But  it  should  be  remembered  that 
the  cloth  and  linen  manufacture  was  of  the  county,  and  not  of  the 
city. 

Between  1503  and  1636  I  have  been  unable  to  find  a  single 
assessment.  I  greatly  regret  the  lack  of  information,  and  I  despair 
of  any  discovery  in  future.  Now  the  facts  which  would  have  to  be 
considered  with  the  assessments,  were  any  such  forthcoming,  are 
the  dissolution  of  the  monasteries,  the  decay  of  the  towns,  the  stint 
of  agriculture,  the  extension  of  sheep  farming,  the  growth  of  the 
native  woollen  manufacture,  the  debasement  and  degradation  of  the 
currency,  the  wars  of  religion,  the  prostration  of  Flanders,  the 
immigration  of  the  Flemish  weavers,  and  the  rise  and  consohdation 
of  the  Dutch  Republic.  In  the  later  part  of  the  time  occurs  the 
most  disastrous  epoch  of  the  Thirty  Years'  War,  and  the  utter  im- 
poverishment of  Germany.  Now  some  of  these  foreign  and  domestic 
events  are  admitted  to  have  greatly  affected  the  distribution  of  wealth 
in  England,  and  all  must  have  done  so,  though  no  information  is 
given  us.  Among  local  events,  the  insurrection  of  Ket  in  Norfolk 
had,  we  are  told,  the  most  disastrous  effects  on  that  county's  pros- 
perity, though  I  believe  that  already  it  had  been  discovered  that  the 
eastern  counties  were  not,  by  reason  of  their  climate,  the  best 
district  in  England  in  which  to  produce  textile  fabrics.  Even  in 
the  fifteenth  century  cloth-weaving  on  a  considerable  scale  was 
pursued  in  small  towns  and  villages.  Fastolfe  bought  cloth  for  years 
together  for  his  soldiers  at  Castle  Combe,  Dorset.  Bishop  Fitz- 
james,  warden  of  Merton  at  the  end  of  the  century,  bought  for  his 
fellows  and  himself  at  Norton  Mandeville  in  Essex. 

The  ship  money  valuation  of  1636  was  said  to  have  been 
studiously  equitable,  and  to  have  been  made  the  basis  of  similar 
assessments  in  later  times.  Charles  and  his  advisers  were  not 
willing  to  add  injustice  to  illegality,  though  it  must  be  admitted  that 
some  of  the  assessments  were  not  a  little  puzzling.  Norfolk,  which, 
133  years  earlier,  had  occupied  the  third  place,  was  sunk  to  the 
twenty-fifth ;  Oxford,  which  was  formerly  second  to  Middlesex,  is  now 
seventeenth.  Cambridge,  which  was  always  among  the  first  eight, 
is  now  twenty-third.   The  first  eight  are  now  Middlesex,  Herts,  Beds. 


162     THE  DI8TBIBUTI0N  OF  WEALTH  IN  ENGLAND. 

Bucks,  Northhants,  Berks,  Leicester,  and  Hunts,  of  which  only 
three  were  in  the  first  rank  before ;    Middlesex  increasiug  rather 
than  diminishing  its   contingent.     The  reason  is  to  be  found,  I 
believe,  in  the  departure  of  manufactures  from  Norfolk,  and  owing 
to  the  exalted  price  of  wheat,  the  great  importance  of  arable  farming 
I       over  pasture.     The  poorest  county  is  Cumberland,  then  Lancashire, 
\       then  Westmoreland,  next  Durham  with  Northumberland.     Middle- 
\    sex  is  assessed  in  amount  at  141  times  per  acre  more  than  Cumber- 
land, and  nearly  as  much  over  Lancashire. 

The  next  assessment  is  the  distribution  of  £400,000  over  the 
counties  and  towns  of  England  and  Wales  (no  Welsh  town  is 
separately  assessed)  for  the  purpose  of  suppressing  the  Irish  re- 
bellion. The  vote  is  taken  in  1641.  I  do  not  pretend  to  account 
for  the  extraordinary  items  in  this  assessment.  Devon  is,  it  seems, 
most  unfairly  treated,  being  rated  in  the  sixth  place  among  the 
contributory  counties.  Norfolk,  which  five  years  before  was  the 
twenty-fifth,  is  now  the  sixth ;  Kent,  formerly  the  fourteenth,  is 
here  the  fourth ;  Suffolk,  previously  tenth,  is  now  third ;  and 
Surrey,  once  eighteenth,  is  now  second.  On  the  other  hand,  Kut- 
land  goes  from  the  eleventh  place  to  the  twenty-fourth ;  North  Hants, 
from  the  fifth  to  the  twenty-sixth ;  Leicester,  from  the  seventh  to 
the  twenty-eighth.  The  poorer  counties  remain  in  nearly  the  same 
order,  only  Lancashire  rises  from  the  thirty-ninth  to  the  thirty-fifth 
place.  I  cannot  but  think  that  this  was  a  hasty,  and  therefore  a 
capricious,  assessment.  I  do  not  think  it  was  designedly  unfair,  for 
Parliament  put  heavy  burdens  on  some  of  the  counties  which  were 
strongly  on  their  side. 

Similar  ix)  this  is  the  assessment  of  March  25,  1649.  This  was 
a  levy  of  £90,000  a  month  for  six  months,  for  the  purpose  of  pay- 
ing the  forces.  It  was  admitted  to  be  the  best  valuation  which  could 
be  made  under  the  circumstances,  but  that  it  should  last  for  six 
months  only  during  which  time  a  searching  and  careful  valuation 
would  be  made.  This  removes  some  of  the  inequalities  of  the 
assessment  made  eight  years  before.  Devon  is  put  in  the  twelfth 
place  ;  Essex  raised  from  the  ninth  to  the  fourth  ;  Cambridge,  from 
the  tenth  to  the  sixth ;  Surrey,  from  the  second  to  the  tenth ; 
Sussex  goes  from  the  twenty-third  to  the  ninth  place.  This  last 
change  is  due,  I  think,  to  the  fact,  that  at  this  time  the  Sussex  iron 


ASSESSMENTS  IN  TEE  SEVENTEENTH  CENTUBY.    153 

works  were  at  the  height  of  their  activity  and  prosperity.  But  the 
furnaces  soon  exhausted  the  wood,  and  though  iron  was  manufac- 
tured in  the  county  up  to  the  beginning  of  the  eighteenth  century, 
the  industry  was  a  decHning  one. 

On  December  25, 1649,  Parliament  published  its  new  assessment. 
This,  as  I  have  said,  was  taken  with  great  care,  and  appears  to 
have  been  generally  followed  in  1672.  In  this  assessment  Suffolk 
still  holds  the  second  place,  though  its  assessment  is  a  little  more 
than  a  tenth  of  that  put  upon  Middlesex,  the  third  place  being  that 
of  Surrey.  The  other  five  are  Herts,  Kent,  Essex,  Bedford,  and 
Rutland.  It  appears  that,  partly  owing  to  the  fact  that  the  eastern 
and  home  counties  were  not  adversely  affected  by  the  war,  which 
was  now  practically  over,  partly  because  the  relations  between 
England  and  the  Continent,  especially  Holland,  were  for  a  time 
increasingly  with  the  eastern  counties;  partly  because  there  was 
a  revival  of  the  woollen  industry  in  Essex,  Eastern  England  was 
found  to  have  greater  resources  than  before.  Korfolk  is  nmth,  and 
is  followed  by  Cambridge.  But  Sussex  sinks  from  the  third  to  the 
twenty-fourth  place.  It  should  be  added  that  the  difference  of 
assessment  per  acre  is  very  slight  in  the  first  fifteen  after  Middle- 
sex. The  relation  of  the  poorer  counties  suffers  scarcely  any  change. 
Altogether  the  valuation  appears  to  be  scrupulously  fair.  The  towns 
under  this  new  valuation  are  in  the  following  order — London, 
Norwich,  South wark,  a  proof  that  London  wealth  was  flowing  into 
Surrey,  Bristol,  Gloucester  (the  trade  of  the  Severn  towns  was 
growing),  Coventry,  Chester,  Southampton,  Hull,  Haverfordwest, 
Newcastle-on-Tyne,  and  Poole.  The  Northumbrian  town  had  suf- 
fered severely  during  the  occupation  of  the  Scots.  For  a  time  its 
coal  trade  was  almost  suspended. 

In  1657  an  assessment  of  £6,000  a  month  was  levied  on  Scot- 
land, £9,000  a  month  on  Ireland,  these  countries  being  added  to 
England  by  the  Act  of  1654,  and  being  entitled  to  send  repre- 
sentatives to  Westminster.  Every  burgh  in  Scotland  is  assessed  ; 
from  Edinburgh  at  £334  12s.  a  month  to  New  Galloway  with  10s. 
In  Ireland  only  one  city,  Dublin,  is  separately  assessed.  If  this 
assessment  be  a  just  one,  which  there  is  no  reason  to  doubt,  Dublin 
was  the  second  city  in  the  British  Islands.  It  is  rated  at  more  than 
twice  the  amount  at  which  Edinburgh  is  put,  and  Edinburgh  is 


154    THE  DISTEIBUTION  OF  WEALTH  IN  ENGLAND, 

more  than  three  times  as  wealthy  as  Dmidee,  the  second  Scottish 
town,  Glasgow  being  the  third. 

On  Nov.  8,  1660,  Parhament  recognized  the  impossibiHty  of 
reviving  the  old  feudal  liabilities,  but  they  were  in  a  difficulty  as  to 
how  to  provide  for  the  deficiency  in  the  royal  revenue.  No  one 
seems  to  have  been  struck  with  the  obvious  equity  of  distributing  the 
reputed  income  of  the  Crown  from  these  sources,  £100,000,  over  the 
estates  which  were  liable  to  it.  At  last,  as  is  well  known,  landlords 
emancipated  their  estates  by  the  hereditary  excise,  i.e.,  at  the  cost  of 
consumers  in  towns,  for  the  excise  only  applied  to  the  public  brewer. 
In  the  interval,  however,  they  projected  a  plan  of  distributing  it 
over  all  real  estate  in  the  form  of  a  land  tax,  and  made  a  valuation 
which  was  levied  on  the  ship  money  assessment,  and  indeed  was 
almost  a  reproduction  of  that  project.  But  the  scheme  was  dropped, 
because  it  was  manifest  that  they  whose  estates  had  never  been 
liable  to  the  impost,  viz.,  the  socagers  and  copyholders,  would  not 
tamely  submit  to  what  at  that  time  would  have  been  a  tax  of  about 
4fd.  in  the  pound,  and  it  was  not  expedient  at  that  crisis  to  make 
any  representatives  of  the  landed  interest,  even  those  who  had 
collected  their  estates  by  the  fortune  of  war  in  OHver's  time,  dis- 
satisfied with  the  Kestoration.  There  was  a  great  deal  of  cautious 
steering  to  be  done  in  the  four|  years  which  followed  the  re-establish- 
ment of  monarchy,  and,  as  we  all  know.  Clarendon  was  sacrificed 
because  he  was  prudent,  and  Charles  was  selfish. 

Though  the  assessment  of  1660  is  professedly  founded  on 
that  of  1636,  it  differs  from  it  in  some  important  particulars,  and 
therefore  seems  to  be  almost  an  independent  valuation.  The  second 
county  is  Suffolk,  as  in  1649  ;  the  third  is  Bedfordshire,  the  fourth 
Kent,  the  next  Hertfordshire,  the  sixth  Essex,  the  seventh  Eutland, 
the  eighth  Sussex.  But  of  these  Kent  is  fourteenth  in  1636,  Essex 
fifteenth,  Rutland  eleventh,  Sussex  twenty-ninth.  Between  the 
second  and  seventh,  there  is  not  to  be  seen  a  very  marked  difference; 
or,  at  least,  not  one  which  is  serious,  in  short,  it  is  about  the  dif- 
ference between  the  second  and  seventh  in  1636,  close  upon  20 
per  cent.  The  contingent  of  Middlesex  is  again  not  quite  so  high 
as  in  previous  valuations.  Perhaps  it  was  felt  too  absurd  to  rate 
the  City  of  London  strictly  to  a  feudal  obligation. 

In  1672,  by  vote  of  February  4th,  a  million  and  a  quarter  was 


THE  VALUATIONS  OF  1660  AND  1672,  166 

granted  to  Charles  to  assist  Lim  in  the  utterly  unprovoked  and 
nefarious  war  which  he  waged  on  the  Dutch.  After  he  had  got  the 
grant,  he  stole  the  goldsmith's  money.  The  tax,  in  accordance  with 
the  tradition  of  the  Commonwealth  period,  was  raised  by  montiily 
contributions  on  the  counties,  including  Durham  and  Cheshire,  and 
on  nine  cities  and  towns.  In  this  assessment,  Middlesex,  apart  from 
London,  is  the  largest  contributor  in  proportion  to  its  acreage,  a 
I)roof  that  London  had  spread  far.  beyond  the  City  walls.  Next 
comes  Suffolk,  but  Surrey  is  close  upon  it.  The  next  five  are  Herts, 
Kent,  Bedford,  Essex,  and  Somerset.  Middlesex,  apart  from  Lon- 
don, is  assessed  at  three  times  the  amount  per  acre  of  the  nearest 
county.  The  contribution  of  the  City  of  London,  despite  the  plague 
and  the  fire,  is  considerably  above  any  other  county,  for  the  con- 
tingent of  Yorkshire,  the  largest  in  area,  though  in  the  rate  per 
acre  it  is  near  the  bottom,  is  £1,600  less  than  that  of  London. 
Bristol  is  now  the  second  city  in  the  kingdom,  for  it  has  got  pos- 
session of  the  plantation  trade,  but  Norwich  is  not  far  behind  it. 
Exeter,  Worcester,  Gloucester,  Haverfordwest,  Lichfield,  and  Poole 
are  also  separately  assessed. 

Here  again  there  are  considerable  changes.  Surrey  is  third,  the 
place  it  had  in  1649.  Somerset,  which  was  fourteenth  in  1649,  is 
eighth  now,  a  change  which  is,  I  make  no  doubt,  due  to  the  spread 
of  the  cloth  industry  in  the  west,  and  especially  in  this  county. 
Essex  was  sixth,  and  now  seventh,  being  but  little  behind  the 
county  which  precedes  it.  The  baize  industry  had  become  an 
important  manufacture  at  Colchester.  Norfolk  occupies  the  twelfth 
instead  of  the  ninth  place.  Generally,  however,  it  seems  that  the 
advantages  which  were  secured  for  the  eastern  counties  by  the  fact 
that  they  hardly  sufi'ered  in  the  civil  wars  still  remain.  The  asso- 
ciated counties  still  remain  the  most  wealthy.  The  poorer  counties, 
as  far  as  the  assessment  goes,  are  very  little  changed,  but  Wales  is 
getting  relatively  poorer,  or  which  is  the  same  thing,  the  other 
counties  are  gradually  making  head.  Though  their  place  is  nearly 
the  same  the  contribution  of  the  poorest  among  them  is  increasing. 

These  facts  are  brought  out  still  more  plainly  in  the  last  assess- 
ment which  I  have  to  deal,  that  of  the  4s.  in  the  pound  land 
tax,  as  granted  by  Parliament.  This  was  to  produce  nearly  two 
millions,  of  which  Middlesex  and  London  contributed  nearly  a 


156     THE  DISTBIBCJTION  OF  WEALTH  IN  ENGLAND, 

sixth.  This  tax,  though  granted  by  the  authority  of  Parliament, 
was  not  assessed  by  the  commissioners  appointed  in  Parliament,  and 
the  distribution  of  the  sum  was  left  to  the  local  authorities.  It  is 
therefore  said,  and  with  some  colour  for  the  statement,  that  those 
who  favoured  the  Revolution  put  their  contribution  at  a  true  valua- 
tion, those  who  affected  Jacobite  and  nonjuring  sympathies  put 
theirs  at  a  low  estimate.  The  tax  was  unaltered  in  amount  till, 
nearly  a  hundred  years  after  its  first  imposition,  it  was  made  per- 
petual by  the  younger  Pitt,  and  the  basis  of  a  financial  operation. 
In  the  original  return  the  cities  and  towns  are  included  in  the 
schedule  printed  in  Pitt's  Act,  for  the  valuations  are  given  in  extenso, 
and  I  remember  that  the  valuation  of  the  city  of  Oxford,  then 
strongly  Whiggish  was,  in  comparison  with  other  towns,  remarkably 
high ;  and  that  of  the  colleges,  which  were  undoubtedly  Jacobite, 
though  not  markedly  nonjuring,  as  this  manner  of  expressing  their 
convictions  would  have  involved  pecuniary  losses,  was  as  markedly 
low.  The  university  and  colleges  of  this  ancient  city  have  been 
very  faithftd  to  reactionary  principles,  and  perfectly  willing  to  profit 
by  their  occasional  ascendency,  but  they  have  been  exceedingly 
unwilling  to  make  any  sacrifice  on  behalf  of  them,  when  such 
principles  have  been  under  a  cloud.  When  there  were  hopes  that 
the  Stuarts  would  be  restored,  half  the  beneficiaries,  ecclesiastical 
and  academical,  were  in  correspondence  with  St.  Germain,  but  they 
took  every  oath  required  by  the  usurping  powers,  satisfied  their 
consciences,  aod  kept  their  preijrmcnts.  Atterbury  and  Jane, 
Smalridge  and  the  rest,  were  no  doubt  anxious  not  to  deprive  the 
local  world  of  letters  of  their  presence. 

In  the  assessment  of  1693  Surrey  takes  the  second  place,  and  at 
a  considerable  interval  above  Hertford,  the  third.  Oxford,  which 
was  rated  fifteenth  in  1672,  is  eighth  in  1693.  Bucks  is  the  fourth, 
Bedford  the  fifth,  Berks  the  sixth,  and  Essex  the  seventh.  Somerset 
has  gone  from  the  eighth  place  to  the  thirteenth,  Kent  from  the  fifth 
to  the  ninth.  Suffolk  was  second  in  1672,  and  is  tenth  now.  Other 
changes,  equally  startling,  are  to  be  found,  and  a  survey  of  the  facts 
suggests  that  the  old  charge  of  partiality  is  made  out.  On  the  whole, 
however,  there  is  a  greater  approach  to  equal  rating.  The  dis- 
crepancy between  the  proportion  to  the  acre  in  the  midland  and 
soub^sern  counties  is  not  so  marked      Salop,  for  instance,  is  thirty- 


THE  POPULATION  OF  ENGLAND  AND.  WALES.        167 

second,  York  thirty-third.  But  the  rate  per  acre  in  Suffolk  is  not 
double  that  of  Shropshire,  and  not  treble  that  of  York.  In  1672 
the  contribution  of  York,  then  thirty-second,  is  a  good  deal  less 
than  a  third  of  the  Suffolk  tax  by  the  acre. 

Many  years  ago  I  stated  it  as  my  opinion,  and  gave  my  reasons, 
that  the  population  of  England  and  Wales,  from  the  beginning  of 
recorded  economical  history  to  the  end  of  the  sixteenth  century,  was 
never  in  excess  of  two  and  a  half  millions,  and  was  often  less.  At 
the  end  of  the  seventeenth  century  it  was  from  five  to  five  and  a 
half  millions.  I  will  proceed  to  point  out  to  you  how  these  figures 
are  arrived  at. 

Every  logician  and  every  economist  will  allow  that  if  you  arrive, 
from  different  premises  or  data,  at  the  same  conclusion,  it  is  cumu- 
lative testimony,  and  the  probability  of  your  conclusion  being  correct 
is  as  high  as  any  evidence  of  fact  can  make  it.  Now  I  arrived  at  my 
conclusion  as  to  the  population  of  England  and  Wales  during  this 
long  period  by  three  processes.  The  first  was  derived  from  the  rate 
of  production.  The  average  production  of  wheat  from  cultivated 
land  was  eight  bushels  an  acre,  and  I  came  to  the  conclusion  that 
the  possible  average  wheat-growing  acreage  of  the  country  was  three 
millions.  Now  I  knew  that  a  quarter  of  wheat  every  year  for  every 
person,  especially  at  a  time  when  other  vegetable  products  fit  for 
human  food  were  unlinov;n,  was  a  fair  allowance.  Then  deducting 
one-sixth  for  seed,  I  got  my  two  and  a  half  millions,  as  the  maximum 
population,  with  a  high  probability,  as  the  allowance  for  seed  is 
rather  short,  that  two  and  a  quarter  is  the  more  correct  figure.  Next 
I  took  the  figures  m  the  poll  tax  of  1877.  The  tax-paying  popula- 
tion can  be  calculated  at  a  little  above  one  and  a  half  millions.  Now 
adding  a  third  for  the  children,  for  the  tax  is  exigible  on  persons 
above  fourteen  only,  and  making  a  liberal  allowance  for  ecclesiastics 
and  mendicants,  no  less  than  a  little  over  162,000,  they  being  also 
exempt,  you  again  get  two  and  a  half  millions.  In  the  third  place, 
I  compared  an  actual  census  of  a  certain  district  in  Kent,  taken  in 
the  sixteenth  century,  with  the  census  of  the  same  district  in  1861, 
and  found  that  it  was  almost  exactly  a  sixth  of  the  later  number. 
The  district  contained  no  large  towns  then  and  contains  none  now. 
Again,  I  found  that  one-sixth  of  the  population  of  1861  gave  me,  by 
comparison  with  the  total  population  of  England,  exactly  the  same 


158     THE  DISTBIBUTION  OF  WEALTH  IN  ENGLAND. 

result  for  the  whole,  viz.,  two  and  a  half  millions.  I  was  a  good 
deal  criticised  when  I  made  my  calculations  by  the  first  method. 
But  long  experience  has  taught  me  that  no  time  is  so  entirely  lost 
as  that  consumed  in  controversy  with  disputants  who  have  no  facts, 
but  only  convictions. 

Now  at  the  end  of  the  seventeenth  century  there  are  similar  kinds 
of  indirect  evidence  to  guide  us.  The  wheat -growing  area  is  extended, 
for  the  price  was  very  high,  so  high  as  to  stimulate  agricultural  pro- 
duction to  the  utmost.  The  produce  is  now  said  to  be  thirteen 
bushels,  but  it  was  no  longer  exclusively  the  food  of  the  people,  for 
rye,  barley,  and  oats  were  occasionally  substituted  for  it.  I  inferred 
that,  making  proper  deductions  for  seed,  the  soil  would,  though  with 
an  inferior  diet,  maintain  five  millions.  Next,  we  have  a  return 
under  the  hearth  tax  of  the  number  of  houses  and  hearths  in  the 
several  English  counties  and  in  Wales,  in  1690.  Allowing  a  little 
more  than  four  to  a  family  this  gives  a  little  over  five  millions.  An 
estimate  of  the  various  religious  sects  gives  imder  five  and  a  quarter 
millions.  And  in  recent  times  a  calculation  by  an  actuary  of  the 
possible  population,  from  baptisms,  marriages,  and  burials,  gives 
under  five  and  a  quarter  millioDS.  Here,  again,  the  evidence  is  cumu- 
lative, and  I  think  conclusive. 

Two  other  facts  may  be  briefly  commented  on  in  conclusion.  I 
have  referred  to  the  hearth  books  of  1690.  This  return  gave  the 
number  of  houses  in  each  county  and  the  number  of  hearths  in  each 
county;  for  certain  houses,  rented  at  no  more  than  20s.  a  year,  were 
exempt  from  the  tax.  Now  the  most  sparsely-peopled  counties  are, 
as  might  be  expected,  Westmoreland  and  Cumberland ;  the  most 
densely  Middlesex  and  Surrey.  In  the  first  two  the  acreage  to  each 
house  is  70*55  and  63-66  acres.  In  Middlesex  and  Surrey  the  same 
analysis  gives  1-819  acres  and  11*79  acres.  It  is  easy  to  see,  then, 
why  Middlesex  yielded  so  much  to  taxation  on  an  assessment  of 
property.  But  I  was  exceedingly  struck  when  I  worked  out  the 
figures  at  the  comparative  density  of  the  northern  population  as  far 
as  houses  go,  and  the  meanness  of  the  buildings  as  far  as  hearths 
go.  The  population  of  Durham  and  Northumberland,  taking  the 
facts  of  the  acres  to  the  house,  is  denser  than  that  of  Dorset,  Lin- 
colnshire, Sussex,  and  Hampshire  ;  the  proportion  of  hearths  to  the 
house  is  a  good  deal  less  than  that  of  any  other  county.     There  are 


HOUSES  AND  HEABTHS  IN  1690,  159 

more  houses  in  Lancashire,  taking  the  same  proportion,  than  in 
Berkshire,  Cambridge,  Cheshire,  Derby,  Devon,  Essex,  Hunts, 
Notts,  Rutland,  and  several  others.  And  the  same  facts  are  visible 
with  certain  other  northern  counties,  though  in  all  it  is  plain  that 
the  standard  of  comfort  was  much  lower.  For  instance,  there  are 
twice  as  many  hearths  to  a  house  in  Devon  and  Dorset  than  there 
are  in  Durham. 

The  growth  of  population  must  have  therefore  been  most  rapid  in 
the  north  during  the  seventeenth  century.  Two  causes  contributed 
to  this :  the  pacification  of  the  Scottish  border  and  the  growth  ot 
textile  industries  in  the  north,  if  indeed  one  can  separate  the  causes. 
On  the  latter  of  these  I  shall  have  to  comment  m  a  later  lecture. 

The  other  point  to  which  I  may  make  a  very  brief  reference — for 
this,  too,  will  be  the  subject  of  another  lecture — is  the  incidence  of 
the  poor  rate  in  the  several  counties  at  the  end  of  Charles  II. 's  reign. 
A  return  of  this  impost  is  given  by  contemporary  writers.  Of  course 
it  is  highest  to  the  acreage  in  Middlesex,  being  nearly  £1  to  every 
three  acres.  It  is  high  in  the  old  manufacturing  county  of  Norfolk. 
It  IS  high  in  some  of  those  counties  which  had  most  peace  during 
the  civil  war.  Bat  it  is  disproportionately  low  in  the  northern 
counties,  and  in  those  which  lie  on  the  line  of  the  Parliamentary 
conflict  with  Charles  I.  I  conclude  that  much  of  the  population 
during  the  troubles  migrated  to  the  more  peaceful  and  settled  dis- 
tricts. There  is  no  doubt  that  the  inhabitants  of  the  north  were 
more  penurious,  more  habituated  to  low  wages,  and  to  a  lower 
standard  of  living,  more  given  to  bye-industries.  It  was  no  doubt 
in  order  to  check  this  migration  that  the  law  of  parochial  settlement 
was  enacted.  In  course  of  time  the  exigencies  of  a  growing  manu- 
facture led  to  the  practical  repeal  of  this  law  of  settlement  in  the 
manufacturing  districts,  and  the  growing  industries  of  the  north 
relieved,  a  century  later,  the  congested  population  of  those  southern 
counties  which  were  now  falUng  behind  in  the  distribution  of  wealth 
and  population. 


vni. 

THE  HISTOHY  OF  AGBICULTURAL  EENTS  IN  ENGLAND. 

The  discussion  as  to  the  origin  of  rent — The  "  indestrucHhle  qualities  " 
of  the  soil — Selden  and  tithes — Interest,  wages,  and  rent — The 
landowners  and  labour  in  history — Civilization  and  government — 
Early  agriculture  in  England — The  rent  of  meadow -land — Bentals — 
The  landlord's  duties — The  New  College  (Oxford)  house  property  in 
the  fifteenth  century — Landlord  cultivation  and  its  effects — Compe- 
tition rents,  late  in  coming — The  law  of  distress,  competitive  and 
famine  rents — The  seventeenth  century  rents — Bye-industries — 
The  landowners  of  the  eighteenth  century — Arthur  Young's  com- 
ments— Lord  LovelVs  agriculture — The  rise  of  rents — Wool  and 
stock  prices — The  colleges  of  Oxford  and  Cambridge, 

Nothing  has  exercised  the  ingemiity  of  economists  more  than  the 
analysis  of  rent  b&s.  The  position  of  rent  and  its  relation  to  industry 
and  taxation  were  problems  which  occupied  the  attention  of  the 
physiocrats ;  of  the  teachers  (in  so  far  as  he  was  taught  by  any  one)  of 
our  Adam  Smith,  and  very  curious  and  wild  conclusions  were  arrived 
at  by  some  of  those  excellent  thinkers.  Smith  gave  his  own  account 
of  rent,  and  a  slip  which  he  made  in  his  analysis,  under  the  circum- 
stances a  somewhat  pardonable  one  for  a  man  who  Hved  in  the  days 
of  corn  laws  and  bounties,  that  rent  enters  into  the  price  of  commo- 
dities instead  of  being  a  product  of  them,  and  of  another  exceedingly 
important  factor,  which  the  critics  unaccountably  overlooked,  was 
duly  commented  on.  The  theory  of  Smith  was  amended  by  Eicardo, 
and  his  definition  of  the  origin  and  increment  of  rent  received, 
for  very  sufficient  reasons,  a  most  thankful  acceptance.  The  merits 
of  Eicardo  in  making  or  announcing  his  discovery  were  challenged 


THE  DISCUSSION  AS  TO  THE  OBIGIN  OF  RENT.      161 

by  MacCuUoch,  wlio  divided  the  original  honours  between  a  Mr.  West 
and  a  Mr.  Anderson  and,  with  excusable  patriotism,  claimed  priority 
for  the  Scotchman.  The  doctrine  of  Eicardo,  with  many  riders,  such 
as  the  law  of  diminishing  returns,  the  margin  of  cultivation,  the 
land  that  pays  no  rent,  and  the  like,  has  been  accepted,  and  forms 
the  staple  of  most  dissertations  on  political  economy.  I  am  con- 
strained to  conclude  that  there  is  little  credit  to  be  got  for  the  re- 
puted discovery ;  that  it  is  partly  a  truism,  partly  a  fallacy,  and  that 
its  acceptance  as  a  sufficient  analysis  of  rent  is  one  of  the  peculiar 
hindrances  which  obstruct  the  way  when  we  have  to  solve  a  present 
difficulty  of  no  common  magnitude.  British  agriculture  has  fallen 
during  the  last  eight  years  on  evil  days.  Its  decUne,  and  with  it  the 
decline  of  the  home  trade,  is  a  most  formidable  fact.  Its  restora- 
tion, in  some  form  or  other,  is  a  matter  of  urgent  interest.  But 
nothiug  tends  to  retard  that  restoration  more  than  false  notions  as 
to  the  nature  of  rent. 

In  deahng  with  this  controversy,  and  in  dealing  with  it  in  my 
own  way,  under  the  light  of  economical  history,  but  with  constant 
reference  to  the  demoustrable,  almost  axiomatic,  principles  of 
economic  science,  I  can  claim  some  special  advantages.  I  am  the 
only  person  who  has  examined  rents  historically.  I  have  studied 
the  history  of  the  same  estate 3  in  some  cases  for  more  than  six 
centuries,  estates  the  "indestructible  powers"  of  which,  to  use 
Eicardo's  expression,  have  not  varied  during  that  long  period,  the 
rents  of  which,  however,  compared  with  any  other  value,  which 
is  measurable  by  money,  have  been  subjected  to  considerable,  to 
astonishing  changes.  I  can  state,  with  perfect  certainty,  what 
this  land  produced  in  com  six  centuries  ago,  and  I  can  also  state 
what  it  produced  at  different  periods  between  that  remote  starting- 
point  and  the  preseat  time.  I  know  that  while  the  value  of  itsy 
corn  produce  has  risen  in  money  units  or  symbols  about  eight 
times  since  my  investigation  began,  the  rent,  in  the  same  units 
or  symbols  has  risen  eighty  times.  I  may  believe  a  great  deal  in 
*'  the  indestructible  powers  of  the  soil,"  though  I  should  be  very 
credulous  if  I  held  that  the  fertility  of  any  soil  was  indestructible, 
as  I  think  every  practical  agriculturist  would  be,  too.  But  I  am 
sure  that  something  else  is  wanting  besides  these  powers  to  account 
for  so  striking  an  elevation.      I  find,  too,  that  while  so  remarkable 

12 


1C2  HISTOliY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND. 

a  price  lias  been  paid  for  the  license  of  using  arable  land,  nothing 
near  so  disproportionate  a  rise  of  price  is  discernible  in  the  rent  of 
of  natural  pasture,  which  never  has  been,  and  never  could  be, 
under  arable  crops,  and  which  therefore  approaches  the  indes- 
tructible more  nearly  than  any  land  which  is  under  the  plough.  I 
shall  try  in  the  course  of  this  lecture  to  point  out  the  circumstances 
which  have  brought  about  the  change.  Mr.  Henry  George  has 
accepted  Kicardo's  theory,  and  inferred  from  it  to  the  confiscation 
of  all  rent  by  the  State.  I  repudiate  Kicardo's  theory,  and  dissent 
from  Mr.  George's  conclusions,  for  reasons  which  I  hope  to  give 
hereafter.  But  it  is  not  a  little  remarkable  that  a  theory  which 
assigns  a  providential  origin  of  rent  should  be  pressed  into  the  ser- 
vice of  the  theorist  who  wishes  to  annul  it ;  while  the  inference 
which  I  draw  from  the  facts  of  the  case,  and  in  which  I  give  the 
historical  events  which  have  developed  it,  is  that  it  would  be  not 
only  a  blunder  and  an  injustice,  but  an  amazing  folly,  to  accept  Mr. 
George's  conclusion.  There  is  a  parallel  to  my  position.  The 
clergy  in  the  time  of  James  I.,  perhaps  some  of  the  clergy  in  the 
days  of  Victoria,  believed  in  the  Divine  origin  of  tithes.  Selden 
believed  that  the  origin  was  human,  and  proved  his  point.  The 
clergy  were  very  angry,  and  got  Selden  put  into  prison  for  his 
pains,  a  contingeucy  which  is  not  entirely  remote,  if  one  presses 
too  strongly  the  truly  conventional  origin  of  rent  in  our  day. 
But  when,  a  few  years  afterwards,  the  Divine  right  of  the  clergy 
was  repudiated  for  a  time,  and  the  tithes  seemed  likely  to  go  with 
the  Divine  right,  the  clergy  gladly  embraced  the  inferior  title  which 
Selden  proved  was  theirs.  The  moral  can  be  easily  gathered.  I 
am  no  more  an  enemy  of  rent  than  I  am  of  any  other  natural 
result.  But  I  decline  to  give  it  a  transcendental  authority  or  to 
imagine  that,  like  every  other  part  of  the  theory  which  economists 
call  the  distribution  of  wealth,  it  is  other  than  a  human  institution, 
recognized  because,  within  proper  limits  and  under  intelligible  con- 
ditions, it  has  a  human  utility. 

Economists  ar^s  perfectly  correct  in  saying  that  the  common 
product  of  capital,  labour,  and  land  is  distributed  among  the  three 
several  agents  or  partners  as  interest,  wages,  and  rent.  By  wages 
I  mean,  as  I  have  previously  explained,  the  labour  of  the  capitalist 
as  well  as  the  labour  of  tha   workman,  for  no  logical  distinction 


SELDEN  AND  TITHES.   INTEREST,  WAGES,  AND  RENT,  168 

can  be  drawn  between  the  wages  of  superintendence  and  the  wages 
of  manual  labour;  for  both  to  be  effective,  imply  what  physiologists 
call  nervous  and  muscular  waste.  The  order  in  which  the  distri- 
bution is  effected  is  that  labour  is  paid  first.  The  payment  of 
labour  is  essential  to  industrial  life,  and  both  interest  and  capital  will 
be  lost  if  the  necessary  claims  of  labour  are  not  met,  while  rent  could 
not  accrue.  In  this  partnership,  the  economist  says,  except  these 
abide  in  the  ship  you  cannot  be  saved.  Labour  paid,  I  do  not  say 
satisfied,  interest  is  paid,  and  this  being  presumably  a  contract 
quantity,  little  need  be  said  about  it.  Last  comes  rent.  Li  com- 
mon language,  interest  on  capital  appears  to  be  paid  first.  That 
it  is  not  is  proved  by  the  fact  that  no  one  would  be  silly  enough 
to  lend  on  a  security  which  brings  in  no  revenue,  unless  it  was 
clear  that  the  advent  of  the  revenue  is  very  near.  For  the  sake  of 
brevity,  I  will  call  interest  A,  wages  B,  and  rent  C ;  and  I  must 
remind  you  that  the  laws  which  govern  the  distribution  of  wealth 
are  mainly  of  human  institution. 

It  is  a  common-place  in  practical  politics  that  they  who  own 
the  land  of  a  country  make  its  laws.  The  statement,  of  course,  is 
at  best  a  strong  tendency.  In  a  country  like  our  own,  where 
tradition  and  habit,  to  say  nothing  of  positive  institutions,  have 
long  deferred  to  the  judgment  of  landowners,  the  common-place 
has  been,  till  recently,  an  admitted  verity.  There  are  symptoms 
that  the  sentiment  is  losing  its  force,  but  no  one  who  has  the 
smallest  knowledge  of  social  history  in  England  can  doubt  that  it 
was  once  overwhelmingly  strong.  Now  it  is  in  human  nature  that 
when,  in  the  distribution  of  wealth,  human  institutions  accord 
extraordinary  authority  to  the  recipients  of  rent,  they  will  use  their 
advantages  to  the  full,  and  be  indignant  with  those  who  dispute 
the  justice  of  these  advantages.  I  will  venture  on  illustrating  my 
position  from  my  own  case.  I  have  very  strong  opinions  on  the 
relations  of  landlord  and  tenant  in  Ireland,  and  have  expressed 
them,  I  trust  with  moderation,  before  a  more  august  assembly  than 
that  which  is  hearing  me  to-day.  But  I  will  candidly  own  that,  if 
I  possessed  a  reputed  £30,000  a  year  in  Irish  rents,  I  should 
find  it  exceedingly  hard  to  reconcile  my  opinions  with  my 
interests.  In  the  absence  of  passion  and  self-interest,  says  the 
English  moralist,  men  are  disposed  to  be  just  towards  each  other. 


164  HISTORY  OF  AGBICULTUEAL  BENTS  IN  ENGLAND. 

In  the  course  of  English  economical  history  C  has  striven,  and 
with  no  little  success,  to  use  the  force  of  law  in  order  to  better 
himself  at  the  expense  of  B.  In  a  former  lecture  I  gave  you  an 
elaborate,  almost  an  exhaustive,  account  of  the  various  labour 
statutes.  These  were  attempts  to  make  the  laws  of  human 
institution  available  for  an  unequal  distribution  of  wealth.  I  shall 
have  to  point  out  in  the  course  of  this  lecture  how  contemporary 
writers  accuse  C  of  extending  the  same  operation  over  B  in  another 
capacity,  ^.e.,  as  a  tenant  farmer.  I  should  exhaust  the  time  at 
my  disposal  if  I  were  to  show  you  how  0  has  contrived  to  mulct 
B  all  round,  especially  in  local  taxation  and  in  the  transference  of 
local  taxation  to  imperial  taxes.  I  shall  have  to  show  you  how, 
during  the  seventeenth  century,  when  C  was  very  much  in  the 
ascendency,  he  did  a  good  many  things  which  have  been  very 
severely  criticised  since,  and  that  I  have  discovered  other  pjractices 
of  his  with  the  same  object.  He  did  not,  for  the  reasons  which  I 
have  given,  that  interest  is  a  contract  price,  succeed  quite  so  well 
with  A.  But  usury  laws  and  the  equity  of  redemption  in  a 
mortgage,  when  it  is  foreclosed  by  non-payment  of  interest,  are 
illustrations  of  the  same  inclinations.  It  was  because  he  noticed 
such  facts  as  these  that  Adam  Smith  called  rent  a  tax,  and  because 
he  saw  that  the  avowed  object  of  many  laws  existing  in  his  time 
was  to  raise  the  rent  of  land  through  the  machinery  of  prices,  that 
he  considered,  and  not  without  colour  of  reason,  that  rent  entered 
into  prices. 

A  country  is  not  civilized  or  safe  unless  it  accepts  and  obeys  a 
central  administration,  whose  first  business  it  is  to  aggregate  all 
the  force  which  is  necessary  for  the  protection  of  society  from 
external  and  internal  foes.  England  for  a  long  time  after  the  Con- 
quest needed  such  a  central  authority.  In  their  efforts  to  con- 
solidate France,  the  French  kings  were  always  thwarted  by  their 
nobles  and  aided  by  their  other  subjects.  Even  the  American 
Republic  finds  itself  constrained  to  strengthen  the  Federal  adminis- 
tration at  the  expense  of  State  rights.  But  there  is  always  a 
danger  that  the  forces  of  government,  the  action  of  Parliaments, 
the  power  of  law,  may  be  made  more  injurious  to  a  community 
than  foreign  and  domestic  foes  are.  Ancient  civilization  was 
wholly  destroyed  by  the  administration  of  the  Roman  Republic 


CIVILIZATION  AND  GOVEBNMENT.  165 

and  Empire.  Bad  Governments  rained  Spain  ;  bad  Governments 
nearly  ruined  Italy.  It  may  be  well  feared  that  even  now  many 
Em-opean  Governments  are  doing  the  work  of  Franken8teia, 
creating  monsters  whom  they  cannot  control.  The  reason  has 
been  that  Governments  harve  used  their  powers,  which  they  call 
the  Constitution,  not  as  a  public  trust,  to  be  faithfully  executed  for 
the  public  good,  but  as  agents  for  their  own  gain.  We  in  Eng- 
land have  had  copious  and  continuous  experience  of  this  breach  of 
trust.  The  people  of  Ireland  have  had  no  other  experience.  The 
historian  of  social  life,  who  knows  that  effects  do  not  cease  when 
the  causes  are  removed,  is  therefore  engaged  in  seeking  out  past 
causes  for  present  distresses,  and  may  be  seem  to  shallow  persons 
to  be  needlessly  indignant  with  bygone  misdeeds,  and  to  be  unduly 
alarmed,  when  he  urges  that  you  cannot  trust  human  nature  to 
legislate  from  the  point  of  view  of  its  own  interests. 

Now  the  capital  fact  in  the  history  of  rent  is  that  agriculture, 
however  rude  the  industry  may  be,  can  always  produce  more  than 
is  necessary  for  the  husbandman's  maintenance  and  that  of  his 
family.  I  find  that  in  early  English  agriculture,  as  in  modern,  a 
workman  to  twenty  acres  is  a  liberal  allowance  of  labour.  Give 
the  labourer  five  persons  to  his  family,  and  assign  a  third  of  the 
land  to  the  supply  of  human  food,  the  other  two-thirds  to  fodder 
and  the  maintenance  of  cattle,  and  let  the  produce  be  a  quarter 
to  an  acre,  and  he  will  grow  seven  quarters  of  food  for  the  con- 
sumption of  five  persons.  But  five  quarters  are  sufficient  for  / 
them.  The  remaining  two  over  and  above  will  supply  seed  andy 
rent.  I  leave  out,  for  the  sake  of  simplicity,  the  same  set  of  facts  for 
the  remaining  two-thirds.  Now,  historically,  it  was  on  this  overplus 
that  the  ancient  lord  laid  his  hands,  and  called  it  rent,  and  Adam 
Smith  was  again  justified  in  calling  rent  a  tax. 

An  ideal  state  of  society  is  one  in  which  there  is  no  rent  at  all, 
in  which  land  is  so  fertile  and  so  abundant  in  its  produce  that  the 
price  which  the  produce  commands  would  be  only  sufficient  to 
pay  interest,  recoup  outlay  and  secure  wages.  Rent  is  of  no  interest 
whatever  to  any  one  but  the  landowner.  If  it  were  extinguished 
by  natural  causes,  no  one  but  he  need  lament.  But  this  state  of  > 
things  never  exists.  If  the  ownership  of  land  remains  in  private 
hands,  and  it  would  be  an  evil  time  should  it  cease  to  be  in  private 


166  HISTORY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND. 

hands,  the  inexorable  law  which  limits  profits  to  an  average  on  the 
calling  would  develop  rent.  On  the  hypothesis  that  capital  and 
skill  are  ready  for  agriculture,  people  will  pay  for  an  agricultural 
advantage  which  secures  profits  above  the  average.  Even  if 
agricultural  land  were  indefinite  in  quantity  and  indefinite  in 
fertility,  some  would  be  in  an  economical  sense  more  fertile  than 
other  land ;  say  by  proximity  to  the  market  only,  and  the 
lessened  charge  of  freight.  So  far  Eicardo  is  right,  but  thus  much 
was  known  in  the  days  of  the  Egyptian  and  Babylonian  kings. 
Rent  is  not  sacred,  but  it  is  natural.  Friction  is  not  sacred,  but 
it  is  natural.  One  would  be  glad  to  see  friction  reduced  to  a 
minimum,  but  it  would  remain  a  very  appreciable  quantity.  And 
if  in  the  economy  of  human  society,  the  cost  of  production  and 
the  cost  of  freight  are  so  diminished,  that  we  are  a  little  nearer 
the  ideal  state  than  we  were  twenty  years  ago,  it  would  be  as 
rational  for  us  to  mourn  as  it  would  be  to  persist  in  going  by  a 
canal  or  a  high  road  when  a  railway  is  ready  for  our  use.  I  may 
be  sorry  for  the  man  who  has  put  his  capital  into  a  canal,  or  has 
lent  his  money  to  road  trustees,  when  the  tolls  cease  to  pay  the 
interest,  but  only  in  the  way  that  I  am  sorry  for  any  one  who  has 
suffered  reverses  of  fortune.  But  if  the  two  parties  alleged  that 
the  canal  and  road  were  sacred,  and  that  I  must  use  them  and  pay 
for  them,  my  compassion  soon  gives  way  to  resentment. 

Of  course  I  do  not  mean  to  imply  that  English  land  will  not 
hereafter  pay  a  rent,  that  the  corn  fields  of  Western  America  and 
Northern  India  have  rendered  its  cultivation  unprofitable  and  im- 
possible; but  I  am  sure  that  the  present,  or  rather  the  traditionary 
system  of  landlord  and  tenant  has  broken  down,  and  that  a  new 
departure  must  be  sought.  English  agriculture  has  faced  in  time 
past  far  more  formidable  difficulties  than  it  has  to  face  now,  and 
has  overcome  them.  But  I  am  entirely  convinced  that  if  land- 
owners, and  they  who  counsel  landowners,  do  not  take  the  pains 
to  understand  the  situation,  and  prepare  themselves  for  the  future, 
with  fresh  knowledge,  a  new  pohcy,  and  a  new  departure,  the 
outlook  as  time  goes  on,  will  be  progressively  more  gloomy.  Nor 
will  any  return  to  agricultural  protection,  an  entirely  hopeless  wish 
on  the  part  ot  some  politicians  and  their  dupes,  relieve  the  state  of 
things  which  is  now  induced  on  husbandry. 


EABLY  DAYS  OF  ENGLISH  AGBICULTVBE.  167 

From  the  earliest  period  of  recorded  agriculture,  by  which  I 
mean  of  such  accounts  as  give  us  an  insight  into  the  occupation 
of  land  till  some  time  after  the  middle  of  the  sixteenth  century, 
ue.,  for  fully  three  centuries,  the  rent  of  agricultural  land  remains 
unaltered  at  from  6d.  to  8d.  an  acre.  This  is  the  rate  paid  by 
tenants  on  lease,  by  socagers  or  free  agricultural  occupiers,  with 
fixity  of  tenure,  and  invariable  rents  under  a  superior  lord  and 
serfs,  whom  the  pedantry  of  the  lawbooks  described  as  holding  at 
the  will  of  the  lord;  whom  the  records  of  Manor  Courts  show  to  have 
had  a  permanent  holding,  though  with  certain  disagreeable  and 
precarious  incidents.  I  shall  take  occasion  to  show  in  a  future 
lecture  how  unchangeable  the  families  were  in  a  manor  or  parish, 
what  significant  economical  consequences  flowed  from  this  fact, 
and  in  particular  how  it  checked  the  development  of  certain 
tendencies  for  centuries.  It  seriously  affected  also  the  creation  of 
competitive  rents,  and  suggested  to  the  inhabitants  of  a  parish, 
that  while  it  was  not  easy  to  import  a  stranger  into  the  number  of 
those  who  lived  on  the  manor,  it  was  in  the  last  degree  improper 
for  one  occupier  to  overbid  another,  and  that  the  traditionary  rent 
was  as  much  as  the  landowner  had  a  right  to  expect.  In  course  of 
time  one  of  the  ways  in  which  the  landowner  tried  to  raise  rents 
in  the  face  of  rising  prices  was  by  the  fines  on  admission  or 
renewal.  There  is  evidence,  too,  that  they  strove  at  the  beginning 
of  the  seventeenth  century  to  exact  increasing  fines  from  their  free 
and  customary  tenants,  to  take  advantage  of  any  neglect  or  default 
in  order  to  raise  the  old  rents  against  the  freeholders,  and  to  greatly 
increase  the  dues  on  copyholders  when  they  succeeded  to  their 
holdings,  or  made  a  conveyance  by  surrender. 

The  rent  of  meadow  land  was  far  higher.  Many  years  ago,  I 
collected  the  rents  paid  for  those  parts  of  Holywell  parish,  in 
Oxford,  which  lie  near  the  Cberwell,  i.e.,  the  low  lying  ground 
which  extends  from  the  northern  extremity  of  the  university  park 
to  the  boundary  of  Magdalene  College,  on  the  west  bank  of  the 
Cherwell,  for  twenty-four  years,  between  1295  and  1388.  The 
practice  was  to  let  the  first  cutting  for  the  making  of  hay,  and  to 
make  the  aftermath  or  rowens,  called  rewannum  in  the  accounts, 
the  occasional  subject  of  a  second  letting.  Tbe  maximum  price  which 
I  have  registered  of  the  first  letting  is  9s.,  the  maximum  of  the  second 


168  HI8T0EY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND, 

2s.  8d.  an  acre,  generally  it  may  be  taken  at  6s.  for  the  first,  Is.  6(3. 
for  the  second,  or  7s.  6d.  an  acre  for  meadow  land  all  the  year 
through.  Similar  cases  have  been  discovered  in  the  fifteenth  and 
sixteenth  centuries.  The  explanation  is  easy.  Natural  pasture 
was  let  at  far  higher  rates  than  arable,  partly  because  there  was  no 
cost  of  cultivation,  or  a  trifling  cost,  and  partly  because  winter 
forage  was  so  scarce.  In  the  seventeenth  century  the  rent  of  arable 
land  varied  from  3s.  6d.  to  6s.  an  acre.  I  have  here,  and  can  show 
you,  three  illustrations  of  what  I  have  said.  This  volume  is  a  list  of 
all  the  rents  paid  on  the  Coke  estate  at  Holkham,  between  1629, 
when  the  great  Chief  Justice  retired  early  from  active  political  and 
forensic  life,  and  1706,  when  the  estates  were  in  the  hands  of  one 
of  his  descendants.  During  the  whole  of  this  period  there  is  very 
little  change  in  the  rent,  which  from  some  twenty  large  holdings 
which  I  have  taken  is  a  little  under  6s.  an  acre.  This  volume  has 
been  lent  me  by  the  present  Lord  Leicester. 

The  second  of  these  rentals  was  procured  for  me  by  Lord  John 
Manners.  It  contains  the  rentals  of  the  Belvoir  estate  up  to  1692, 
and  afterwards.  The  land  comprised  in  this  rental  is  very  well 
known  to  me.  The  average  rent  is  8s.  6d.  before  1692,  and  about 
8s.  lOd.  for  a  time  after  1692.  The  noble  family  of  Manners  has 
been  traditionally  indulgent  to  their  tenants,  and  the  lettings  on  the 
Belvoir  estates  are  very  low,  though  the  quality  of  the  land  is  good. 
The  third  is  a  rental  of  certain  lands  possessed  by  Pierrepont,  Earl 
of  Kingston,  in  1689.  This  rental  comes  from  the  Pepys  Papers  in 
the  Kawlinbon  Collection.  I  do  not  know  why  Pepys  had  the  list. 
This  Earl  of  Kingston  died  in  1690,  and  was  succeeded  by  his 
brother,  who  afterwards  became  Marquis  of  Dorchester  and  Duke  of 
Kingston.  The  rental  of  this  estate  is  apparently  very  high,  but 
a  considerable  part  of  it,  more  than  half,  is  pasture  and  meadow, 
which  still  bore  a  relatively  high  price  to  arable.  Only  two  small 
tenancies  are  entirely  arable,  and  in  these,  including  a  house  in 
each  case,  the  rent  is  6s.  8d.  an  acre.  On  the  whole,  I  believe 
that  fairly  good  arable  land  was  about  4s.  6d.  an  acre  during 
the  seventeenth  century,  and  that  there  was  a  special  reason, 
to  which  I  shall  presently  refer,  for  the  high  rate  o^  the  Coke 
lettings. 

From  the  very  earliest  times  in  English  life,  rural  and  urban, 


BENTALS.    THE  LANDLOBUS  DUTIES,  169 

the  landowner  or  house-owner,  being  the  ground  landlord,  effected 
all  permanent  improvements  and  did  all  repairs.  The  buildings 
had  been  originally  erected  at  his  expense,  and  were  maintained  by 
him  after  he  ceased  to  cultivate  the  land  himself,  and  procured 
tenants,  first  on  a  stock  and  land  lease,  then  on  an  ordinary  tenancy 
for  years  or  at  will.  In  letting  agricultural  land,  the  landowner  of 
the  fifteenth  century  even  insured  his  tenant  against  extraordinary 
losses.  Thus  New  College  let  one  of  its  estates  in  Wilts,  and 
covenanted  to  indemnify  its  tenant  in  case  more  than  10  per  cent. 
of  his  sheep  died  in  the  course  of  the  year,  for  the  whole  excess. 
The  risk  was  not  slight.  In  two  consecutive  years,  1447  and  1448, 
the  college  paid  for  73  and  116  sheep  on  this  single  farm.  In  1500, 
Magdalene  College,  which  pursued  the  same  system,  paid  for  no  less 
than  607  sheep  to  its  tenants.  The  liabilities  of  the  landowner 
were  by  tradition  very  heavy,  and  he  was  expected  to  make  them 
good.  The  law  of  clerical  dilapidations  is  a  survival  of  a  custom  or 
practice  which  was  once  universal.  Even  in  later  times,  this 
liability  of  the  landowner  to  do  repairs  and  effect  all  permanent 
improvements  was  so  characteristic  of  Enghsh  tenancies  that  they 
are  distinguished  as  being  under  the  English  system.  A  totally 
different  practice  prevailed  till  recently  in  Scotland,  and  still  pre- 
vails in  Ireland,  where  it  is  the  almost  invariable  rule  that  all 
buildings  and  permanent  improvements  have  been  effected  at  the 
instance  of  the  tenant,  a  practice  which  has  given  rise  to  the 
recognition  by  Parliament  of  a  joint  ownership  between  landlord 
and  tenant  in  Ireland,  under  the  name  of  tenant  right. 

This  English  tradition  is  curiously  illustrated  from  the  records 
of  house  property  in  towns  during  the  fifteenth  century.  New 
College  possessed  in  1453,  house  property  to  the  annual  value  of 
£58  Is.  Id.,  from  which  fixed  charges  amounting  to  £12  lis  7d., 
and  payable  to  divers  persons,  chiefly  ecclesiastics,  were  deducted. 
Its  net  income  would  therefore  appear  to  be  £45  9s.  6d.  But  the 
expenditure  on  the  tenements  is  very  large.  Every  repair  is  paid 
for,  even  to  signs  for  inns,  the  well  buckets  and  rope,  and 
latchets  and  locks  for  doors.  What  with  these  expenses,  and  with 
void  tenements,  the  college  only  gets  £3  5s.  clear  for  the  year. 
The  possession  of  house  property  in  towns  during  the  fifteenth 
century,  and  for  more  than  two  and  a  half  centuries  afterwards, 


170  HISTORY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND, 

was  very  unlike  what  it  is  at  the  present  time,  when  town  rents 
Lave  been  singularly  swollen. 

But  before  I  deal  with  the  further  rise  in  rents,  it  is  well  to  refer 
briefly  to  the  system  of  agriculture  in  England  to  the  end  of  the 
seventeenth  century.  I  have  already  dwelt  on  it,  but  I  must 
remind  you  here  of  a  few  particulars.  The  economist  who  deals 
with  facts  is  constantly  constrained  to  cite  his  facts,  to  repeat 
his  facts,  because  they  serve  to  illustrate  various  results  in  the 
economy  of  society. 

You  will  remember  that  for  a  long  time,  certainly  for  a  century, 
perhaps  for  longer,  the  landowner  was  also  a  cultivator,  owning  a 
considerable  capital,  interested  in  the  adequate  cultivation  of  the 
soil,  and,  being  possessed  of  property  which  might  easily  be  stolen, 
convinced  that  it  was  necessary  to  keep  the  peace.  I  am  sure 
that  for  the  latter  result,  the  existing  machinery  was  effective. 
In  the  very  numerous  accounts,  many  thousands,  that  I  have  read, 
it  is  very  rarely  indeed  that  any  loss  by  theft  is  recorded,  any  dread 
of  possible  theft  expressed,  even  in  times  of  famine.  The  educa- 
tion of  the  English  people  in  the  principle  of  respect  for  property  was 
very  effective.  It  is  true  that  everybody  had  property,  and  there- 
fore everybody  was  interested  against  thieves  and  pilferers,  and  in 
respect  for  personal  rights.  I  believe  that  the  custom  adopted  by 
landowners  of  cultivating  their  own  estates  grew  up  during  the 
long,  peaceful,  prosperous  reign  of  Henry  III.,  and  the  complaints 
against  his  government,  the  criticism  on  his  policy,  and,  in  the  end, 
the  armed  resistance  to  it  and  him  arose  from  the  fact  that 
England  made  great  material  progress  during  the  first  sixty  years 
of  the  thirteenth  century.  To  this  Matthew  Paris,  one  of  the 
few  chroniclers  who  is  able  to  interpret  social  phenomena,  bears 
witness. 

The  agriculture  of  the  time  was  rude,  and  the  produce  scanty. 
But  the  best  agriculture  was  undoubtedly  that  of  the  landowners, 
and  their  bailiffs.  They  could  show  the  smaller  tenants  all  they 
knew,  and  in  their  way  could  make  experiments.  Now  one  of  the 
most  costly  of  these  experiments  was  their  marling  of  land.  It 
was  a  costly  process,  for  the  expense  was  constantly  equal  to  the 
fee  simple  of  the  land,  as  I  know  from  the  charges  incurred  in  the 
undertaking.     Marl  is  an  earth  partly  calcareous,  partly  argillaceous 


LANDLOBD  CULTIVATION.    COMPETITIVE  BENTS,    171 

which  is  of  great  service  to  stiff  and  to  thin  soils,  breaking  the  one 
and  giving  substance  to  the  other.  "  It  mends  any  kind  of  land," 
says  a  writer  on  husbandry  in  the  early  sixteenth  century.  It 
is  curious  that  when  the  new  agriculture  of  the  eighteenth 
century  was  adopted,  the  most  enterprising  of  the  landowners 
revived  the  policy  of  the  thirteenth  and  fourteenth.  I  am  dis- 
posed to  believe  also  that  these  ancient  landowning  agriculturists 
sometimes  strove  to  improve  the  breed  of  sheep,  a  matter  of 
supreme  importance  when  wool  was  so  dear,  produce  was  so 
accurately  estimated,  and  local  breeds  were  of  such  various 
value.  This  is,  I  think,  proved  by  the  high  prices,  prices  beyond 
parallel,  occasionally  given  for  rams.  "When  landlord  cultiva- 
tion ceased,  marling  was  abandoned,  it  was  too  costly  for  the 
risk,  and  sheep-breeding  suffered  at  least  some  deterioration. 
I  have  already  explained  the  cause  why  landlord  cultivation  was 
abandoned,  and  the  stock  and  land  lease  adopted.  The  social  results 
which  followed  were  many  and  various. 

There  is  no  trace  of  competition  rents  during  the  whole  of  the 
fifteenth  century,  nor  do  I  think  that  they  come  into  practical 
existence  during  the  sixteenth.  There  is  evidence  however  that 
eviction  or  famine  rents,  or  compulsory  exaltations  of  rent  under  the 
threat  of  eviction,  or  by  colour  of  law,  were  practised  in  the 
sixteenth  century.  Fitzherbert,  who  wrote  in  the  early  part  of 
Henry  VIII's.  reign,  and  Latimer,  who  preached  his  sermons 
towards  the  end  of  it,  and  up  to  the  middle  of  the  century,  speak, 
the  one  on  the  peril  which  the  improving  husbandman  fears  from 
a  rapacious  landlord  ;  the  other  on  the  contrast  between  the  tenure 
of  his  own  father's  holding,  and  that  of  the  occupier  who  has 
succeeded  him,  and  is  being  ruinously  rackrented.  The  complaints 
of  the  husbandman  in  Stafford's  pamphlet  pubUahed  in  the  last 
quarter  of  the  same  century,  suggest  a  similar  grievance.  But 
in  all  cases,  the  complaint  is  that  the  tenant  is  overcharged  by  the 
landowner,  or  made  to  pay  rent  on  his  own  improvements.  This 
could  only  be  operative  under  threat  of  eviction  and  loss,  and 
though  in  the  simple  husbandry  of  the  times  eviction  had  no 
such  serious  meaning  as  it  now  has,  it  was  still  seen,  apart  from 
competition,  to  be  a  powerful  means  of  extorting  rent.  I  do 
not  doubt,  too,  that  the  Act  of  1676,  under  which  the  universities 


172  HISTOBY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND. 

and  colleges,  with  the  two  historic  schools  of  Winchester  and 
Eton,  were  empowered  or  rather  constrained,  to  take  a  third  of 
their  rents  in  kind,  or  in  kind  turned  into  money,  was  intended 
to  assist  their  corporations  to  procure,  in  an  indirect  way,  some 
of  the  advantages  of  a  competitive  rent. 

No  one,  who  knows  anything  about  early  economical  history, 
can  doubt  that  rent  was  originally,  and  for  centuries,  a  tax, 
imposed  by  the  strong  on  the  weak,  in  consideration  of  a  real  or 
pretended  protection  of  the  tenant.  The  invariable  and  fixed 
character  of  the  tax  seems  to  me  to  prove  this,  and  the  fact  that 
no  attempt  was  made  to  alter  the  fixed  rent,  except  by  open  or 
disguised  violence  or  fraud  is  to  me  conclusive.  Nay,  the  terms  on 
which  precarious  or  terminable  holdings  were  granted  appears  to 
me  to  be  strong  collateral  evidence,  for  I  do  not  find  that  the 
rent  per  acre  varied  very  much  from  the  old  customary  rates. 
Indeed  it  could  not  well  be,  for  at  the  end  of  the  sixteenth  century, 
I  inferred  from  prices  that  land  would  bear  but  a  slight  increase 
of  rent,  and,  after  makmg  my  calculations,  I  found  that  I  was 
almost  exactly  correct,  by  the  register  of  rent  actually  paid  for  the 
holding,  whose  possible  rent  I  was  estimating. 

And  here  I  may  observe  that  the  remedy  of  the  landlord,  for 
an  overdue  rent,  by  distress,  was  very  imperfect.  By  the  law,  the 
rent  issued  out  of  the  tenure,  and  upon  this  tenure  only  could 
the  landowner  distrain.  Hence,  if  he  lost  count  of  the  tenure  (an 
easy  thing  under  the  system  of  open  fields,  where  each  occupier 
had  in  succession  only  a  few/p^glfifeilf^as  I  showed  you  in  the 
Gamlingay  survey),  he  could  not  venture  on  distraint  for  fear  of 
trespass.  I  have  constantly  found  in  the  fifteenth  century 
accounts,  that  rents,  though  recorded  for  near  a  century,  are 
declared  to  be  irrecoverable,  because  the  bailiff  did  not  know  on 
what  land  to  distrain.  Hence  the  law  of  distress,  to  the  ultimate 
injury  of  the  agriculturist,  was  supplemented,  by  the  action  of  debt 
and  the  action  of  covenant  being  grafted  on  i  them,  and  the 
insidious  principle  that  rent  is  a  secured  debt,  avoidable  by  no 
length  of  time  was  retained  in  connection  with  these  new 
methods  of  recovery.  Now  there  is  no  doubt  that  of  late  years, 
the  difficulties  of  the  farmer  were  seriously  enhanced  by  the  law 
of  distress,   which   by  giving   priority   to   the  landlord's  claim. 


COMPETITIVE  AND  FAMINE  BENTS,  178 

his  principal  creditor,  weakened  his  credit  elsewhere,  and  notably 
with  the  country  bankers,  who  began  in  a  declining  or  unprosperous 
market  to  be  alarmed  about  their  security. 

No  human  skill  can  draw  the  line  between  a  competitive  and  a 
famine  rent.  In  theory,  a  competitive  rent  is  one  in  which  the 
farmer  is  not  only  perfectly  free  to  occupy  or  leave  alone,  but  is 
able  to  extricate  his  capital  from  his  holding  as  readily  as  he  can 
transfer  a  balance  from  one  banker  to  another,  or  his  savings  from 
one  public  security  to  another.  Unfortunately  most  political 
economists,  misled  by  their  abstract  method  and  habitual 
disregard  for  facts,  treat  the  movements  of  capital  as  all  equally 
fluid  or  nearly  so.  A  competitive  rent,  in  the  economical  sense  of 
the  word,  only  exists  for  a  moment,  even  under  the  most  favourable 
times.  Undoubtedly  at  the  moment  of  the  contract  for  occupancy, 
the  intending  tenant  may  seem  to  be  entirely  able  to  take  it  or 
leave  it  alone.  I  say  may  seem,  for  it  is  perhaps  necessary  for  him 
to  continue  his  calhng,  because  to  abandon  it  is  to  abandon  the 
means  of  a  livelihood,  and  he  is  therefore  no  more  a  free  agent  in 
the  contract  than  a  purchaser  is  in  a  besieged  and  straitened 
town.  But  the  moment  that  he  has  agreed  to  the  contract,  and 
entered  on  his  occupancy,  his  freedom  ceases.  He  cannot,  with- 
out serious  loss,  extricate  himself  from  his  holding,  for  no  man 
can  withdraw  intact  agricultural  capital  from  a  farm.  I  set  down 
the  loss  at  10  per  cent.,  but  my  friend,  Sir  James  Caird,  who  is 
certainly  better  informed  as  to  the  economical  position  of  the 
British  farmer  than  any  man  whom  I  ever  met,  says  that  it  should 
be  at  least  15.  Now  it  is  on  this  certainty  that  rapacious 
landowners  and  their  mischief-making  agents  have  screwed  up 
rents,  and  reduced  agriculture  to  its  present  distressful  condition, 
a  condition  from  which  as  yet  I  see  no  escape.  Let  me  put  the 
facts  in  a  concrete  form.  A  man  has  taken  a  farm  of  five  hundred 
acres,  at  £500  a  year,  and  brings  on  it,  the  quantity  necessary  for 
first-class  husbandry,  a  capital  of  £5,000,  or  one-third  of  its  selling 
value  at  the  best  of  times.  Now  let  us  imagine  that  his  landlord 
determines  to  raise  his  rent  to  22s.  6d.  an  acre,  and  gives  him 
notice  to  agree  to  this  or  quit.  His  loss  by  migration  will  be  at 
least  £500,  or  according  to  Sir  James  Caird  £750  at  least,  and  the 
better  agriculturist  he  is,  the  surer  is  his  loss.     This  he  knows. 

Of    THt  ' 

KIVF^BSITY 


174  HISTOBY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND. 

and  if  it  had  been  the  habit  of  a  farmer  to  keep  accounts,  he 
would  have  seen  the  meaning  of  the  alternative,  for  I  am  assuming 
that  the  sums  I  named  are  the  maxima  from  which  agricultural 
profit  can  be  expected.  But  as  he  does  not  he  argues  thus  :  *'  If  I 
go  I  shall  lose  from  ^£500  to  £750  down  ;  if  I  stay  at  the  increased 
rent  I  shall  have  to  pay  £62  10s.  more.  I'll  risk  it,  prices  may 
improve,  I  can  save  a  bit  one  way  or  the  other,  and  make  both 
ends  meet."  Had  he  kept  accounts  he  could  at  once  have  seen 
that  he  is  losing  his  capital  as  surely  as  if  he  had  quitted  his 
holding. 

No  just  landlord  ever  exacts  a  strictly  competitive  rent  from  his 
tenant,  and  recent  experience  proves  that  no  wise  landlord  will 
exact  what  no  just  landlord  will.  It  is  the  business  of  a  landowner 
to  learn  what  rent  land  will  bear,  how  to  adjust  it  to  the  market, 
and  it  is  no  excuse  to  allege  that  foolish  tenants  have  offered  him 
rents  which  they  could  not  possibly  pay.  A  sensible  banker,  if  a 
borrower  offers  him  15  per  cent,  for  a  loan,  could  have  no  better 
reason  than  the  offer  for  declining  the  advance  without  a  moment's 
hesitation. 

The  rents  of  the  seventeenth  century,  small  as  they  seem  to  us, 
began  with  competition  rents  which  rapidly  slid  into  famine  rents, 
by  which  I  mean  rents  which  leave  the  occupiers  with  a  bare  main- 
tenance, without  the  power  of  either  improving  or  saving.  The 
earliest  writer  on  husbandry  m  the  seventeenth  century  admits  the 
fact  of  competition  rents,  defends  the  lord's  action  in  taking  what 
is  offered  him,  and  treats  the  farmer's  remonstrances  with  ill-dis- 
guised contempt.  One  would  think  in  reading  this  author's  argu- 
ments, that  one  was  hearing  the  mischievous  chatter  of  the  modern 
surveyor.  The  agricultural  writers  of  the  seventeenth  century 
point  out  in  vain  how  lucrative  is  the  new  agriculture  of  Holland 
and  Flanders,  how  easy  it  is  to  follow  it,  how  deplorably  backward 
in  ail  that  makes  his  art  is  the  English  husbandman,  and  then 
passionately  denounce  the  ill-judged  rapacity  of  the  landlord. 
Their  rents  to  be  sure  were  poor  enough,  but  as  the  position  of  the 
tenant  was  precarious,  they  were  more  than  the  cultivator  could 
bear,  and  an  absolute  bar  to  agricultural  progress.  At  the  end  of  the 
century,  Gregory  King,  who  makes  an  estimate  of  incomes  which 
is,  I  am  persuaded,  on  the  whole  correct,  while  he  credits  a  bishop 


BYE-INDVSTBIE8.  176 

with  the  largest  power  of  saving  out  of  his  official  income,  viz., 
£400  a  year  from  £1,800,  assigns  the  least  capacity  of  saving  to  the 
farmer,  for  he  credits  him  with  a  saving  power  of  only  25s.  a  year 
out  of  an  income  of  £42  10s. 

There  was,  however,  in  some  parts  of  England,  notably  in  the 
eastern  counties,  in  the  west  and  north,  a  bye-industry  of  suf- 
ficient importance  as  to  make  the  tenant-farmer  comparatively 
indifferent  to  accretions  of  rent.  This  was  the  linen  and  woollen 
industry,  carried  on,  I  am  persuaded,  in  most  farmhouses  in 
certain  districts  of  England,  the  products  being  collected  and  pur- 
chased by  travelling  agents.  Such,  almost  if  not  quite  within  living 
memory,  were  the  woollen,  particularly  the  flannel,  industry  of 
some  parts  of  Lancashire  and  Yorkshire.  Such  was  a  generation 
ago  the  universal  practice  of  Ulster,  and  I  have  recently  been  told 
by  those  who  can  well  remember  the  universality  of  the  practice, 
that  the  small  farmers  of  Northern  Ireland  were  comparatively 
indifferent  to  the  magnitude  of  their  rents,  out  of  all  proportion  as 
I  know  to  the  value  of  their  holdings,  if  their  spinning-wheels  and 
looms  produced  enough  to  pay  the  spring  and  autumn  gale.  When, 
however,  the  larger  manufactories  extinguished  in  part  (for  the 
industry  is  still  carried  on)  domestic  weaving,  the  rent  to  which 
the  peasant  was  indifferent  became  a  famine  rent,  and  absolutely 
unbearable. 

Every  civilized  community  in  Europe  has  found  it  necessary  in 
one  way  or  other  to  regulate  the  relations  of  landlord  and  tenant, 
and  to  save  the  latter  from  the  capricious  and  ruinous  rapacity  of 
the  former.  In  France  it  was  effected  at  the  Revolution,  and  with 
terrible  suddenness  in  the  autumn  of  1789.  In  Germany,  Stein 
and  Hardenberg  saw  that  a  change  was  imperative  after  the 
humiliation  of  Jena.  In  Holland  it  was  a  later  reform,  as  it  was 
in  Scandinavia.  In  Denmark,  which  forty  years  ago  was  as  miser-' 
able  and  as  turbulent  as  Ireland,  it  was  the  benevolent  work  of 
Bishop  Monrad,  the  enlightened  minister  who  had  to  bear  the  brunt 
of  the  scandalously  unjust  Schleswig-Holstein  War.  In  Russia,  it 
was  the  work  of  the  late  emperor.  I  do  not  say  that  in  every  case, 
the  reform  was  done  in  the  best  way,  but  I  am  assured  that  the 
reform  had  to  be  done. 

In  the  early  part  of  the  eighteenth  century,  the  rent  of  agricnl- 


176  EISTOBY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND, 

tural  land,  according  to  Jethro  Tull,  one  of  the  earliest  advocates, 
from  the  evidence  of  his  own  practice  and  experience  of  the  new 
agriculture,  was  on  an  average  of  7s.  an  acre.  At  the  beginning 
of  the  last  quarter,  according  to  Arthur  Young,  who  traversed  the 
greater  part  of  England,  it  was  a  little  below  10s.  The  rise  was 
the  work  of  the  landowners,  was  entirely  deserved,  and  is  most 
instructive.  The  average  price  of  wheat  during  the  seventeenth 
century  was  41s.  a  quarter.  It  was  a  good  deal  less  in  the  first 
half  of  the  eighteenth,  and  rents  were  doubled.  Other  agricultural 
prices  were  not  higher,  some  were  as  people  would  say  now-a-days 
ruinously  low,  for  wool  was  only  3d.  a  pound  for  a  considerable 
period,  i.e.,  at  a  less  nominal  price  that  it  often  was  in  the  fourteenth 
and  fifteenth  centuries.  The  rise  in  rent  during  the  eighteenth 
century  proves  that  rent  depends  in  a  slight  degree  on  the  natural 
powers  of  the  soil,  and  to  a  limited  extent,  these  natural  powers 
being  easily  exhaustible,  and  a  great  deal  on  the  acquired  capacity 
of  the  cultivator — this  cause  of  rent  depending  on  the  general  dif- 
fusion of  agricultural  skill.  In  short,  to  use  a  logical  expression, 
which  is,  I  doubt  not,  familiar  to  most  of  you,  what  in  Kicardo's 
definition  of  rent  is  made  objective;  to  those  who  know  anything 
whatever  of  the  history  of  agriculture,  is  subjective. 

I  do  not  imagine  that  the  singular  and  all- but  universal  passion 
for  practical  agriculture,  which  seems  to  have  taken  possession  of 
the  country  gentlemen  of  England  during  the  eighteenth  century, 
had  in  view  the  improvement  of  the  tenants'  experience.  "  The 
farming  tribe,"  says  Arthur  Young,  when  writing  about  the  later 
manifestations  of  the  fashion,  "is  made  up  of  all  ranks,  from 
a  duke  to  an  apprentice."  In  some  classes  of  society,  as  I  well 
remember,  the  passion  for  farming  had  not  passed  away  in  my 
youth.  It  was,  I  make  no  doubt,  an  intelligent  appreciation  of 
the  profit  which  might  be  made  of  the  new  agriculture.  It  is  not 
unlikely  that  the  country  gentleman,  seeing  how  rapidly  the  new 
aristocracy  of  trade  was  growing  in  wealth  and  influence,  deter- 
mined to  see  whether  they  could  rival  the  men  whom  they  despised 
and  disliked.  The  EngUsh  aristocracy  of  the  eighteenth  century 
was  peculiarly  infected  with  the  pride  of  rank.  I  have  been  amused 
at  one  scheme  of  the  Lords.  They  planned  the  foundation  of  an 
academy  for  their  own  order,  to  be  established  by  Act  of  Parha- 


LOBD  LOVELUS  AGBICULTUHE.  Vtl 

ment,  and  maintained  at  the  public  expense,  but  closed  to  any  but 
the  noble,  and  twice  referred  the  scheme  to  a  select  committee. 
Now  there  was  very  little  to  be  got  out  of  Walpole,  and  still  lees 
out  of  Newcastle.  So  they  very  wisely  and  usefully  betook  them- 
selves to  agriculture.  **  There  have  been,"  says  Young,  *'  more 
experiments,  more  discoveries,  and  more  general  good  sense  dis- 
played within  these  ten  years  in  agricultural  pursuits  than  in  a 
hundred  preceding  years."  He  might,  had  he  taken  in  the  second 
quarter  of  the  eighteenth  century,  have  said,  with  perfect  accuracy, 
than  in  all  recorded  history.  '*  And,"  he  adds,  "  if  this  noble  spirit 
continues,  we  shall  soon  see  husbandry  in  perfection,  and  built 
upon  as  just  and  philosophical  principles" — his  comparison  is 
whimsical  enough  for  his  time — "  as  the  art  of  medicine." 

It  is  invidious  and  unfair,  when  one  comments  on  the  singularly 
useful  career  of  the  English  landowners  during  the  eighteenth  cen- 
tury to  dwell  exclusively  on  the  view  of  their  personal  interest.  That 
they  intended  to  better  themselves  is  probable,  but  they  did  the 
highest  public  service,  in  throwing  themselves  with  such  enthusiasm 
into  that  noble  art  which  possesses  such  peculiar  attractions  to  those 
who  have  prudently  practised  it.  Least  of  all  would  I  complain 
that  their  gains  were  large,  and  that  they  took  pride  in  the  business 
on  which  they  entered  with  such  zeal.  Lord  Lovell,  whose 
farming-book  I  have  in  my  hand,  lent  me  by  his  public- spirited 
descendant  and  heir,  the  present  Lord  Leicester,  was  one  of  the 
earliest  and  certainly  one  of  the  most  comprehensive  of  the  new 
**  farming  tribe."  He  grew  corn,  he  was  the  butcher  of  the  neigh- 
bourhood, and  did  not  disdain  to  supply  his  noble  neighbours  and 
take  their  money.  He  is  the  maltster,  the  brick- burner,  the  lime- 
burner  to  the  district.  He  superintends  the  whole  farm,  checks 
all  the  accounts,  examines  every  item,  and  after  making  a  reason- 
able deduction  from  his  profits  for  his  rent,  paying  his  workmen 
lil  _  ;lly  for  the  time,  and  making  considerable  and  expensive 
improvements  on  the  estate,  by  marling  a  portion  of  it,  declares  a 
profit  of  over  36  per  cent,  on  his  first  year's  expenditure. 

We  may  be  sure  that  there  was  a  good  deal  of  talk  in  North 
Norfolk  about  the  noble  lord's  experiments.  The  gossip  of  the 
time  is  not  recorded,  but  we  may  be  certain  that  the  men  of  the 
old  school  shook  their  heads,  imajrined  that  Lord  Lovell  bad  gone 

13 


178  HI8T0BY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND. 

crazy,  spoke  of  the  turnip-fields  as  his  folly,  and  wondered  what 
he  thought  could  be  got  by  the  new-fangled  grasses.  And  we  may 
be  sure  that  the  bailiff  who,  when  the  scheme  was  first  begun, 
wagged  his  head  with  the  wisest  of  the  farmers,  but  perhaps  held 
his  peace  when  the  year's  profit  was  declared,  bragged  of  the  work 
that  had  been  done,  and  took  some  of  the  credit  to  himself.  For 
you  may  have  noticed  that  the  incredulous  are  generally  the  first 
to  welcome  success,  and  to  deny  that  they  ever  suffered  from  incre- 
dulity. The  commonest  of  all  fabulists  is  the  man  that  tells  you 
that  he  all  along  believed  matters  would  come  right,  though  your 
ears  may  still  be  deafened  by  his  lugubrious  predictions  of  failure. 

The  farmers  saw  and  slowly  followed  the  new  system.  It  is 
true  that  fifty  years  later,  there  was  much  slovenliness  in  practice, 
and,  above  all  things,  as  Arthur  Young  complains,  "  one  cannot 
get  the  farmers  to  keep  accounts."  I  have  often  thought  how 
delighted  this  excellent  and  judicious  person  would  have  been 
could  he  have  seen,  inspected,  and  have  read  a  bailiff's  account  of 
the  fourteenth  century,  with  its  exhaustive  recital  of  particulars 
and  careful  balancing  of  receipt  and  expenditure.  Of  course  the 
rise  of  rents,  though  by  no  means  considerable  at  first,  ensued,  and 
most  justly.  No  men  had  more  fairly  earned  the  bettering  of  their 
improved  position  than  the  English  landowners  had  earned  theirs 
in  the  eighteenth  century. 

There  were  still  serious  impediments  to  the  new  agriculture. 
The  custom  of  open  fields,  on  which  it  was  impossible  to  practise  it, 
was  general,  and  the  enclosure  of  such  fields,  by  which  I  do  not 
mean  the  appropriation  of  the  common  lands,  was  exceedingly 
costly,  dilatory;  and  uncertain.  Many  of  these  enclosures  were 
effected,  however,  in  the  eighteenth  century.  Others,  infinitely  less 
excusable,  were  the  work  of  the  nineteenth,  the  plea  being  the 
increase  of  arable  culture,  an  argument  as  germane  as  that  of 
the  man  who  picks  your  pocket  on  the  plea  that  he  can  make  a 
more  profitable  use  of  your  money  than  you  can.  I  have  myself 
seen  common  fields  in  Warwickshire,  but  I  presume  that  the  system 
is  now  completely  extinct,  though  I  believe  lammas  lands,  in  which 
there  was  private  property  in  the  soil  from  Lady  Day  to  Michael- 
mas, and  general  property  for  the  other  six  months  of  the  year, 
subsist. 


THE  BISE  OF  BENTS.     WOOL  AND  STOCK  PBICES,     179 

The  rents  of  8s.  6d.  an  acre  in  1692  rose  to  86s.  8d.  in  1854. 
Agriculture  was  still  progressive,  the  cost  of  materials  was  greatly 
reduced,  while  the  cost  of  production  (in  agriculture  the  proportion 
of  cost  to  the  market  value  of  the  produce)  was  greatly  diminished, 
the  price  of  products  being  exceedingly  high,  and  the  rate  of  wages 
being  disgracefully  and  dishonestly  low.  Hardly  a  year  passed 
without  the  trial  of  some  new  experiment.  I  well  remember  an  old 
acquaintance,  who  came  out  of  Wiltshire  into  Hampshire,  a  sheep 
drover,  who  had  saved  a  little  money,  and  hired  a  small  farm,  with 
a  good  deal  of  down  in  his  holding.  He  ploughed  the  downs,  burnt 
the  turf,  manured  the  ground  well,  sowed  turnips  and  oats  succes- 
sively, knowing  that  chalk  is  a  sponge  which  holds  and  gives  back 
all  it  receives,  kept  accounts,  made  a  fortune,  and  died  a  wealthy 
banker  and  landowner. 

There  are  one  or  two  points  in  this  history  of  rent,  which  1  will 
employ  the  rest  of  my  time  in  commenting  on.  I  have  mentioned 
more  than  once  that  the  price  of  wool  was  exceedingly  high  in  the 
Middle  Ages.  But  there  is  no  trace  of  a  rise  in  rent  being  conse- 
quent on  a  rise  in  the  price  of  wool,  though  wool  is  eminently  an 
agricultural  produce.  But  the  operation  of  those  laws  which 
determine  rent  is  far  less  operative  over  that  capital  of  the  farmer 
which  can  be  transferred  with  little  loss  from  one  locality  to  another 
than  it  is  over  that  which,  from  necessity,  must  be  committed  to 
the  soil  Diffused  skill  in  cattle-breeding  and  sheep-raising  can  be 
far  less  easily  mulcted  by  rent  agencies  than  diffused  skill  in  growing 
crops.  The  principal  lever  in  the  elevation  of  rents  has  been  the 
loss  consequent  upon  dispossession.  This  is  the  real  ''  unearned  in- 
crement." No  doubt,  to  let  a  man  hold  land  at  much  less  rent  than 
the  land  will  bear,  as  Arthur  Young  constantly  complains,  is  to  en- 
courage indolence ;  and  among  the  indirect  benefits  which  have  come 
from  rackrenting,  as  an  offset  to  its  fatal  injuries  is,  that  up  to  a 
certain  point  it  calls  forth  energy,  forethought,  and  thrift.  Of 
course  it  may  bring  discontent  and  despair.  But  within  a  certain 
limit  it  equalizes  unequal  opportunities.  But,  on  the  other  hand, 
cattle-  and  sheep-raising  are  matters  of  personal  rather  than  of 
general  skill,  and  it  is  clear  that  in  the  Middle  Ages,  as  sometimes  in 
our  time,  the  operation  was  exceedingly  hazardous.  In  the  absence 
of  winter  roots,  and  the  stint  of  hay,  a  dry  summer  followed  by  a 


ISO  HISTOBY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND. 

hard  winter  would  have  had  very  serious  effects  on  the  sheep 
master.  In  the  same  way,  the  rent  of  land,  let  to  so  capricious  and 
risky  a  produce  as  the  hop  is,  bears  no  proportion  to  the  occasional 
gains,  and  the  invariable  hopes  of  the  hop  grower. 

I  thought  that  I  could  have  detected  the  rent  of  land  through  the 
reserved  rents  and  fines  of  the  colleges  in  Oxford  and  Cambridge, 
and  in  the  estates  of  Winchester  and  Eton  Colleges.  But  after  much 
pains  taken,  I  found  that  my  research  was  disappointing.  These 
corporations  for  a  long  time  were  in  great  peril.  Had  Henry  lived 
longer,  he  would  have  devoured  them.  The  bishops  of  Elizabeth's 
reign  were  plundered  by  her  nobles,  with  the  Queen's  connivance. 
The  Cecils  took  no  little  ransom  from  the  see  of  Peterborough. 
Exeter  was  reduced  from  a  rich  to  a  poor  bishopric  by  the  western 
nobility.  Every  one  knows  the  story  of  Hatton  and  the  Bishop  of 
Ely,  and  Elizabeth's  threats.  At  last  the  Queen,  perhaps  at  the 
instance  of  Parliament,  came  to  the  rescue  of  the  prelates  and 
passed  the  disabling  statute. 

The  College's  had  much  reason  to  be  alarmed.  Though  I  do  not 
find  that  they  lost  their  estates,  they  became  exceedingly  poor  after 
the  Eeformation  and  the  rise  in  prices.  I  can  hardly  see  a  change 
in  their  revenue  when  everything  became  trebled  in  price.  The  fact 
is  these  corporations  leased  their  lands  on  very  beneficial  terms  to 
great  men.  Cecil  and  Derby  took  estates  at  one  half  their  annual 
value  from  King's  College.  Similar  leases  were  granted  by  the 
Oxford  corporations.  The  Crown  came  to  the  rescue  with  the  Act  of 
1576,  the  Keserved  Corn  Eents  Act,  and  the  Colleges  began  to  exact 
fines  on  renewals,  at  first  timidly  and  always  ignorantly.  They  were 
put  to  great  straits  as  time  went  on  to  find  out  what  their  property 
was  worth,  and  to  fine  accordingly,  though  under  the  mark  when 
they  did  know.  They  never  got  its  value,  and  the  lessees  made 
great  profits  from  the  difference  between  their  own  rents  and  that 
of  the  under-tenants. 

Arable  rents  have  risen,  in  the  course  of  the  last  two  and  three 
quarter  centuries,  in  many  cases,  eighty  times,  while  wheat  has  risen 
eight  times.  Pasture  has  risen  about  ten  times.  Now  if  there  be 
such  a  thing  as  the  indestructible  powers  of  the  soil,  it  is  more 
characteristic  of  pasture,  which  cannot  profitably  be  ploughed  up, 
than  of  anythhig  else.     But  the  cause  of  the  first  elevation,  as  I 


COLLEGE  BENTS,  OXFORD  AND  CAMBBIDGE.         181 

hope  I  have  now  sufficiently  pointed  out,  is  diffused  agricultural 
pkill,  and  competition  for  business  profits.  This  is  not  indeed  the 
cause  of  all  rent,  for,  as  I  have  said,  there  is  a  famine  rent,  under 
which  the  landowner  by  familiar  processes  takes  from  the  cultivator 
of  the  soil  all  but  a  bare  subsistence.  During  the  seventeenth  ceutury 
the  English  farmer  had  experience  of  a  famine  rent.  For  the  last 
eight  years,  it  has  been  renewed.  The  Irish  farmer,  who  is  in  nine  cases 
out  of  ten  a  labourer  paid  in  land,  has  had  no  other  experience  than 
that  of  a  famine  rent.  The  Nemesis  has  come  in  both  countries, 
and  even  the  nineteen  years  lease,  which  the  Duke  of  Argyll  thinks 
the  quintessence  of  human  wisdom,  gilded  by  the  most  perfect 
justice,  is  discredited.  When  will  people  learn  that  high  prices  d ) 
not  make  high  rents,  that  folly  may  destroy  what  it  can  never  re- 
cover,.and  that  the  best  way  to  extinguish  all  human  interest  in  rent 
is  to  deny  that  it  is  a  matter  of  human  institution,  while  it  is  the 
result  of  an  intelligence  possessed  by  the  occupier  and  not  by  the 
landowner,  except  under  pecuhar  circumstances,  and  is  in  no  sense 
divine  or  providential  ? 

One  of  the  ways  in  which  the  owners  of  land  have  striven  to  main- 
tain artificial  rents  has  been,  first,  by  starving  the  peasant,  next  Dy 
putting  the  cost  of  his  necessary  maintenance  on  other  people.  I  have 
already  described  to  you  how  this  system  was  developed.  It  has 
been  most  disastroud  to  those  who  devised  and  carried  it  out.  I 
don't  know  whether  the  farmer  and  landowner  will  ever  find  out 
that  low  wages  do  not  mean  cheap  labour  ;  but  it  is  a  common-place 
even  with  economists  of  the  stupid  school,  and  a  truth  which  they 
bavQ  been  able  to  grasp,  for  they  learnt  so  much  from  Adam 
Smith  But  that  their  misery  was  to  be  an  ever-increasing  cause 
of  rent,  was  left  for  the  genius  of  a  London  stockbroker  to 
enunciate,  for  the  economists  and  country  gentlemen  to  accept, 
and  to  be  refuted  by  facts.  More  than  twenty  years  ago  I  pointed 
out  the  nature  of  the  problem  and  its  inevitable  solution.  I  suffered 
the  ordinary  fate  of  those  who  are  more  far-sighted  than  the  people 
among  whom  they  live — no  great  feat  here.  I  might  perhaps,  if  time 
permitted,  discuss  with  you  what  must  be  the  rent  of  the  future, 
for  that  of  the  past  is  vanishing,  and  for  reasons  which  you  might 
•gather,  and  probably  will,  from  what  I  have  said.  Or  I  might  fortify 
myself  with  the  example  of  a  great  man  of  my  youth,  the  late  Sir 


182  EI8T0BY  OF  AGBICULTUBAL  BENTS  IN  ENGLAND, 

Eobert  Peel,  and  decline  to  commit  myself  to  a  prediction  and  a 
remedy  till  I  am  called  in.  This,  however,  is  perfectly  certain — 
the  landowners  of  the  eighteenth  century  made  the  British  farmer 
the  best  agriculturist  in  the  world ;  the  landowners  of  the  nine- 
teenth have  beggared  him. 


IX. 

METALLIC  CUEKENCIES. 

Early  English  money — The  marlc  and  the  pound — Changes  in  the 
weight  of  the  penny — Silver  produced  in  England — The  King's 
Exchanger — The  ratios  of  silver  and  gold — Causes  affecting  these 
ratios — Bimetallism — Gresham's  Law — Payments  made  by  weight 
not  by  tale — Beasons  proving  this — The  debasement  by  Henry  VIII. 
— The  foreign  exchanges — The  recoinage  in  1696 — The  suspension 
of  cash  payments — Seigniorages  on  coins — The  efficiency  of  the 
currency — Currency  Tcept  for  two  objects^  internal  and  foreign 
trade. 

The  subject  on  which  I  am  to  lecture  to-day  is  rather  technicaL 
It  can  only  be  understood  when  some  figures  are  mastered,  and 
there  are  some  figures,  as  I  shall  show  in  the  course  of  what  I 
have  to  say,  which  would  be  wholly  deceptive,  if  they  were  not 
explained  away.  The  right  apprehension  of  what  the  English 
currency  was  is  absolutely  essential  towards  the  interpretation  of 
money  values  in  the  economical  history  of  England,  and  the 
interpretation  >  of  that  economical  history  gives  meaning  and 
vitality  to  constitutional  and  political  events,  transforming  them 
from  disconnected  and  unrelated  annals  into  a  cohesive  and  con- 
tinuous vitality.  I  hope  that  the  laborious  antiquaries  who  dig 
out  what  they  call  the  facts  of  the  English  constitution,  and  edit 
the  opinions  which  they  discover,  will  take  no  offence  at  what  I 
say.  Their  work  has  a  high  value,  because  it  is  the  collection  of 
materials,  and  without  materials,  no  man,  except  a  metaphysician, 
can  build.  But  there  is  really  nothing  constructive  in  constitu- 
tional and  political  history.     The  proof  lies  in  the  fact  that  the 


184  METALLIC  CUEBKNCIES, 

most  iugenioiis  theories  are  liable  to  destructive  criticism,  even 
when  propounded  by  men  of  real  genius. 

Those  Teutonic  nations  which  were  never  brought  under  the 
direct  influence  of  the  Eoman  administration  had  a  unit  of 
money  which  they  called  the  mark.  Those  parts  of  Western 
Europe  which  were  brought  under  the  direct  administration  of 
Eome  had  a  unit  which  they  called  the  pound,  livre,  lire.  Some- 
times, as  in  England,  the  two  systems  were  used  in  calculations, 
and  in  early  times  quantities  were  expressed  in  marks  almost  as 
frequently  as  they  were  in  pounds.  From  a  very  early  date  the 
mark  was  reckoned  at  two-thirds  of  the  pound.  Neither  the 
pound  or  the  mark  was  ever  coined.  They  were  simply  money  of 
account.  Moreover,  the  only  currency  employed  in  circulation  for 
a  long  time  was  silver,  and  in  raany  countries  silver  remained  the 
only  currency  till  very  recently.  In  some  communities,  gold  has 
been  substituted  for  silver.  In  some,  paper  has  taken  the  place  of 
silver.  In  England,  the  pound  of  silver,  called  the  Tower  or 
Saxon  pound,  contained  5,400  grains.  In  1527,  Henry  VIIL 
substituted  the  Troy  for  the  Tower  pound,  containing  5,7G0 
grains.  The  penny  then  contained  22 1  grains  of  the  older,  24 
grains  of  the  later  pound.  The  fineness  of  the  standard  was,  in 
theory,  11*1  pure  silver  and  '9  alloy ;  and  the  king's  officers  at 
the  exchequer  took  care  that  the  money  paid  should  be  up  to 
the  standard  of  fineness,  as  we  learn  from  that  very  ancient 
financial  treatise  "  The  Dialogue  on  the  Exchequer,"  first  printed 
by  Madox. 

Nobody  knows  in  what  nation  or  in  what  place,  the  capital 
invention  of  the  coin  was  made — whether  it  was  in  Greece,  or 
Sicily,  or  Italy,  where,  by  the  way,  the  ancient  currency  was 
copper,  a  metal  more  frequently  found  native  in  a  pure  state 
than  any,  excepting  gold.  We  know  that  there  were  countries  far 
advanced  in  civilization  which  had  no  coins.  There  were  none  in 
Egypt,  in  Assyria,  in  Babylonia,  in  the  old  Phoenician  colonies ;  for 
coins  are  sure  to  be  lost  now  and  then,  and  are  exceedingly  indes- 
tructible. None  have  been  found  in  the  ruins  of  these  countries, 
and  yet  it  appears,  from  recent  research,  that  Babylonia  had  an 
elaborate  system  of  banking,  and  all  the  machinery  of  transferring 
balances  from  one  account  to  another.    In  the  same  way,  though 


EABLY  ENGLISH  MONEY,  185 

there  is  a  small  currency  in  China,  there  is  no  silver  coinage ;  for 
it  is  said  that  Mexican  dollars,  which  serve,  or  did  serve,  to  liquidate 
balances,  are  melted  into  ingots  when  they  get  into  the  native 
merchants'  hands,  these  ingots  being  stamped  with  the  trade  mark 
of  the  merchant  who  casts  and  re-issues  them.  Such,  probably, 
were  the  means  by  which  exchanges  were  made  in  eaity  times,  and 
among  those  nations  which  never  adopted  a  money  currency. 
Some  measure  of  value  is  needful  for  business  of  a  rudimentary 
kind,  but  we  see,  from  the  example  of  these  ancient  peoples,  that 
great  progress  can  be  made  without  coined  money. 

I  need  not  trouble  you  with  the  common-places  which  you  will 
find  in  all  books  on  political  economy,  as  to  the  motives  which 
have  induced  nations  to  adopt  the  use  of  gold  "and  silver  coins. 
The  economists  have  interpreted  these  functions  with  great  pre- 
cision and  clearness.  It  is  not  wonderful  that  they  have,  for  many 
of  them  who  have  written  on  the  subject  have  been  engaged  in 
what  is  called  the  money  market,  or  have  been  famiUar  with  those 
who  have  been  so  engaged.  I  have  thought  it  my  duty  to  speak 
with  exceeding  plainness  about  the  Ricardian  theory  of  rent, 
because  I  hold  it  to  be  so  exceedingly  incorrect,  and  so  trans- 
cendently  mischievous,  since  it  encourages  men  to  hope  for 
impossibilities.  But  on  money  and  banking,  on  currency  questions 
generally,  and  especially  on  the  most  abstruse  of  them,  Ricardo's 
authority  is  of  the  highest  character.  Here  he  was  in  his  element, 
for  he  was  an  exceedingly  acute  stock -jol)ber,  in  the  days  when  a 
prosperous  stock-jobber  was  almost  a  strategist,  as  you  may  learn, 
if  you  like,  from  biographies  about  successful  people  in  this  calling. 
Rude  and  comparatively  savage  races  imitated  currencies.  I  know 
nothing  more  ingenious  and  more  conclusive  than  the  manner  in 
which  Mr.  Evans,  the  numismatologist,  has  traced  the  British 
gold  coinage,  which  is  tolerably  abuudant  in  collections,  to  the 
imitation  of  a  Macedonian  stater  of  one  of  the  later  Temenid 
kings. 

If  you  take  up  books  in  which  the  English  currency  is  treated, 
you  will  find  the  following  statement  of  facts.  The  original 
standard  of  weight  in  the  silver  penny  may  be  taken  at  3.  In 
1299,  Edward  I.  reduced  it  to  2-871 ;  in  1344  Edward  III.  reduced 
it  to  2-622,  in  1346  to  2-583,  and  in  1353  to  2-325.     In  1412. 


186  METALLIC  CUBEENCIE8. 

Henry  lY.  lessened  it  to  1*987;  and  in  1464  Edward  IV.  to  1-55. 
In  1527,  Henry  VIII.  brought  it  down  to  1-378,  and  in  1543  to 
1*163.  In  1560,  after  the  restoration  of  the  currency  by  Elizabeth, 
it  is  at  1*033,  and  in  1601,  she  brought  it  to  exactly  one-third  of 
the  weight  it  stood  at  303  years  before.  I  am  obliged  to  supply 
you  with  these  details  because  they  are  essential  to  my  criticism  on 
the  inference  which  is  drawn  from  them.  In  one  particular  they 
are  exact.  The  proportionate  weights  of  what  is  called  the  silver 
penny  correspond  to  these  registered  mutations.  I  have,  long  ago, 
put  this  fact  to  the  test,  by  weighing  clean  and  unworn  coins  in 
chemical  scales.  I  hope  that  I  shall  be  able  to  prove  to  you  that  I 
threw  away  my  time  and  trouble. 

Now  silver,  up  to  the  great  change  in  money  values,  was  pro- 
duced largely  in  England.  The  commonest  ore  in  which  silver  is 
found  is  galena,  the  native  suphuret  of  lead,  in  which  ore  it  is  said 
to  be  always  present,  though  some  is  even  now  too  poor  to  bear  the 
cost  of  refining,  and  much  must  have  been  then,  when  the  refiners' 
art  was  rude.  In  the  various  works  which  I  have  read  on  the 
early  trade  of  England,  and  in  the  statistics  regulating  that  trade, 
I  have  never  met  with  imports  of  lead.  I  have  no  doubt  that 
England  supplied  France,  and  not  a  little  of  Western  Europe  with 
this  metal,  which  was  comparatively  cheap,  and  greatly  used  for 
church  roofing.  The  greater  part  of  the  silver  of  Western  Europe 
was  also,  I  believe,  derived  from  England,  despite  the  restraints 
put  by  statute  on  its  exportation.  If  there  be  any  truth  in  the 
constantly  recurring  story  about  the  enormous  and  incessant 
exactions  of  Papal  avarice  in  England,  not  a  little  of  it  went  to 
Rome  and  Avignon,  and  then  again  to  Rome.  If  we  give  credit  to 
the  complaints,  for  even  the  monks,  generally  friendly  to  the  Pope, 
make  them,  the  overflow  of  money  to  the  Pope's  court,  in  the 
palmy  days,  was  annually  equal  to  the  royal  revenue.  But  the 
English  did  not  become  impoverished  by  the  efflux.  Lead,  the 
ore  of  silver,  faUs  in  price  during  the  fifteenth  century,  and  there 
is  no  reason  to  believe  that  the  art  of  metallurgy  was  improved, 
and  at  that  time,  it  was  rather  dangerous  to  have  a  scientific 
reputation,  for  experiment  was  liable  to  be  confounded  with 
sorcery,  the  most  deadly  charge  that  could  be  made  against 
any  one. 


8ILVEB  PBODUCED  IN  ENGLAND.  187 

For  reasons  which  are  explained  elsewhere,  the  Government  of 
England  made  strenuous  efforts  to  prevent  the  exportation  of 
silver,  and  I  am  quite  sure  that  the  payments  made  to  the  Pope 
and  his  court,  turned  public  feeling  against  the  supremacy  of 
the  Koman  Pontiff,  and  hastened  the  breach  of  the  sixteenth 
century.  Perhaps,  had  the  Pope  been  acquainted  with  monetary 
science,  in  so  far  as  it  is  understood  by  every  one  now,  and  had 
grappled  with  the  economic  heresy  which  treats  it  as  the  only 
wealth,  he  might  have  mitigated  the  feeling.  But  more  than  any 
sovereign  of  the  Middle  Ages,  the  Pope  spent  wealth. 

The  opinion  of  English  statesmen  was,  that  in  order  to  secure 
and  retain  abundant  wealth,  it  was  necessary  that  on  every  article 
exported,  a  balance  in  specie  should  be  paid  to  the  English  dealer. 
The  Government,  therefore,  limited  the  market  for  certain  impor- 
tant English  exports  to  certain  towns,  called  staple  towns,  of  which 
Calais,  for  wool,  the  principal  and  most  valuable  of  English 
exports,  was  the  chief.  But  as  the  merchants  might  prefer  their 
own  profits  to  the  theory  of  the  administration,  a  high  officer  of 
state,  called  the  King's  Exchanger,  was  appointed,  whose  duty  it 
was,  by  himself  or  deputy,  to  see  that  a  balance  of  money  was 
paid  on  each  transaction.  The  first  of  these  officials  was  De  la 
Pole,  in  the  time  of  Edward  III.,  the  ancestor  of  those  Earls  and 
Dukes  of  Suffolk  who  had  so  tragic  a  history  in  the  fifteenth 
century.  This  official  foolery  went  on  till  the  time  of  Charles  I., 
who  appointed  Kich,  Earl  of  Holland,  to  the  office.  But  the 
London  merchants,  from  whom  Charles  was  perpetually  borrowing 
money,  resented  the  absurdity,  declared  that  the  patent  was 
illegal,  at  Selden's  instance,  and  induced  Charles  to  revoke  it.  I 
speak  of  the  policy  as  it  deserves,  but  there  are  people  in  our  own 
day,  who  might  know  better,  who  are  foolish  or  dishonest  enough 
to  allege  that  the  character  of  our  trade  proves  that  gold  and  silver 
are  leaving  us.  In  form,  the  prohibition  on  the  exportation  of 
gold  and  silver  coin  continued  till  1816.  It  had  a  curious  effect. 
People  were  allowed  to  export  gold  in  bars,  foreign  coin,  and 
bullion,  the  produce  of  foreign  coin,  and  an  oath  had  to  be  taken, 
that  exported  bars  were  of  this  character.  People  were  hired  to 
Bwear  that  they  were,  and  sworn-off  gold,  as  it  was  called,  was 
worth  three  halfpence  an  ounce  more  than  other  gold  was,  which 


188  METALLIC  CUBBENCIE8, 

had  not  been  subjected  to  the  ceremony.  You  will  see  that 
three  halfpence  an  ounce  was  the  bullion  dealer's  payment  for 
perjury. 

Of  course  the  operation  of  the  King's  Exchanger  was  nugatory. 
Very  much  more  bulky  things  than  silver  were  easily  sent  out  of 
and  into  the  country,  at  a  time  when  ships  were  small,  harbours 
numerous  and  easy  of  access,  and  prevention  impossible.  The 
merchant  of  the  fourteenth  and  fifteenth  centuries,  and  for  many 
a  century  afterwards,  did  not  want  to  keep  useless  money  by  him, 
especially  when  he  saw  that  there  was  a  profit  in  getting  rid  of  it. 
So  he  laughed  at  the  staple  and  the  exchanger  with  perfect  im- 
punity. Had  the  operation  been  effectual,  it  would  have  heightened 
prices,  because  money  would  have  been  in  excess.  But  during  the 
time  when  this  machinery  was  at  work,  especially  in  the  fifteenth 
century,  prices  were  falling  all  round,  a  fact  of  which  I  shall  be 
able  to  make  notable  use  by  and  by.  It  is,  however,  possible 
that  the  prohibition  may  have  been  treated  as  a  risk,  and  have 
thereupon  increased  the  cost  of  discounting  bills.  At  any  rate, 
1  am  convinced  that  in  later  times  such  was  the  effect  of 
the  law. 

I  have  said  that  silver  was  for  a  long  time  the  only  currency. 
There  is  a  story,  told  by  the  annalists  and  repeated  by  Euding,  that 
in  1257,  Henry  III.  issued  a  gold  coinage  at  the  rate  of  10  to  1,  but 
that  the  London  citizens  resented  the  practice,  and  that  the  king 
took  it  back  at  the  proportion  proclaimed,  exchanging  it  however 
into  silver  at  a  charge  of  2^  per  cent.  But  the  reality  of  this  issue 
has  been  doubted.  No  specimen  has  ever  been  found  of  the  coin, 
and  it  is  probable  that  Henry  only  intended  to  give  currency  to 
some  foreign  gold  coins.  In  1282,  Henry  bought  some  gold  florins 
and  byzants  for  the  purpose  of  making  plate,  at  from  9  and  10 
to  1.  Thirty  years  Jater,  Edward  I.  purchases  a  considerable 
quantity  of  gold,  for  the  purpose  of  gilding  parts  of  the  crosses 
which  he  set  up  in  memory  of  his  queen,  Eleanor  of  Castile.  Here 
the  proportion  is  a  little  over  12^  to  1.  In  1345,  Edward  III. 
issued  gold  coins  in  the  proportion  of  13|  to  1.  According  to  Lord 
Liverpool,  in  his  "Coins  of  the  Eealm"  (a  work  which  I  have 
heard  was  actually  composed  by  Kuding),  during  the  fifteenth  and 
sixteenth  centuries  the  proportion  fell  to  between  lOf  and  11*8  to  1. 


THE  BATIOS  OF  SILVER  AND  GOLD.  189 

In  the  seventeenth  the  ratio  was  15  to  1.  At  the  resumption 
of  cash  payments,  the  rate  was  recoginzed  as  15|  to  1 ;  but 
silver  as  a  legal  tender  was  demonetized.  At  the  present  time  it  is 
about  22  k)  1. 

The  ratio  of  gold  to  silver,  coeteris  paribus ^  depends  on  their 
use  in  currency.  Many  years  ago,  I  was  a  good  deal  struck  with 
the  rapid  rise  in  the  relative  value  of  gold  in  1296,  over  that  in 
1262.  Bub  an  examination  of  Muratori's  invaluable  antiquities 
explained  it.  During  the  last  quarter  of  the  thirteenth  century, 
and  through  the  greater  part  of  the  fom'teenth,  numerous  Italian 
cities  adopted  a  gold  currency.  Their  trade  was  with  the  East, 
where  gold  currencies  were  customary.  A  demand  for  the  metal 
occuiured,  and  the  price  of  necessity  rose.  Thi3  gold  currency 
was  even  more  general  in  the  fourteenth  century.  For  example, 
that  of  Avignon,  then  the  seat  of  the  Popes,  was  goir,  and  people 
who  brought  silver  to  the  curia,  as  I  have  shown,  had  to  pay 
handsomely  on  the  exchange.  I  have  myself  little  direct  evidence 
as  to  the  causes  which  depressed  the  value  of  gold  in  the  fifteenth 
and  sixteenth  centuries.  Of  course  the  relations  of  Europe  with 
the  East  were  greatly  modified  as  the  Eastern  empire  decayed, 
and  finally  fell,  and  the  old  roads  over  Central  Asia  were  effectually, 
blocked. 

When  the  new  money  came  in  from  the  West,  the  ratio  of  15  to  1 
was  estabhshed.  The  ratio  was  not  free  from  serious  fluctuations, 
which  some  of  the  bimetallists  have  not  sufficiently  studied,  when 
they  dwell  so  complacently  on  its  steadiness  in  some  of  their  pub- 
lications. At  one  time  gold  was  found  to  be  overvalued,  and  silver 
disappeared  ;  at  another  silver,  and  gold  disappeared,  so  that  finan- 
cial operations  were  resorted  to  in  order  to  restore  the  equilibrium. 
In  1853,  M.  Chevallier  thought  that  silver  would  disappear  from 
France,  owing  to  the  gold  discoveries  in  Australia  and  California, 
and  Mr.  Cobden  translated  his  book.  After  the  war  of  1870,  Ger- 
many determined  on  establishing  a  gold  currency,  and  a  few  years 
afterwards  Italy  foUowed  her  example.  Instantly  commenced  a 
fall  in  the  price  of  silver,  which  has  continued  since.  The  States 
of  the  Latin  Union  diminished  their  silver  issues  at  their  respective 
mints,  and  the  fall  became  more  rapid.  If  Austria  and  Kussia  had 
retired  their  paper   currencies   the   downward  movement  might 


190  METALLIC  CUEBENCIE8, 

have  been  in  part,  if  not  in  whole,  arrested.  If  China  were  to 
adopt  a  silver  currency  for  her  enormous  and  populous  empire,  the 
ratio  would  be  totally  altered.  There  are  rumours  that  such  a 
scheme  is  contemplated.  I  will  venture  on  predicting  that  what  I 
have  said  would  be  rapidly  fulfilled  if  the  scheme  takes  effect. 

It  is  impossible  to  say  to  what  extent  a  government  may  regulate 
its  internal  currency  as  long  as  that  currency  is  unaffected  by  the 
foreign  exchanges,  which  treat  coin  as  mere  metal,  as  soon  as  it 
becomes  what  Adam  Smith  calls  the  money  of  the  great  mercantile 
republic.  It  is  said  that  the  paper  currency  of  Russia  circulates  at 
its  nominal  value,  though  in  the  exchange  it  is  only  half  the  value 
of  the  silver  rouble,  and  the  silver  rouble  suffers  from  its  own  de- 
preciation. But  with  the  outer  world  Russia  deals  in  gold  only. 
It  claims  all  its  import  duties  in  gold  ;  it  makes  what  foreign  pur- 
chases it  needs  in  gold.  So  with  India.  I  have  been  told  that  the 
purchasing  power  of  the  rupee  is  not  diminished  in  the  peninsula. 
But  the  relations  of  England  to  India,  as  a  creditor  country,  are 
gold  relations.  The  pensions  of  its  civil  and  military  retired 
officers  are  indeed  paid  in  silver,  and  have  to  bear  the  loss  of  the 
exchange.     But  its  external  debt  is  a  gold-bearing  debt. 

Some  time  ago  I  had  an  opportunity  of  talking  with  Mr.  Fre- 
mantle,  the  Master  or  Deputy- Master  of  the  Mint.  I  asked  him 
whether,  with  so  prodigious  a  seignorage  on  the  English  silver 
coins,  now  over  30  per  cent,  above  their  gold  value,  there  was  in 
his  opinion  any  private  coining  of  genuine  silver  money.  He  told  me 
that  the  Mint  authorities  had  naturally  had  their  attention  directed 
to  the  risk.  But  they  had  found  no  evidence  of  the  practice.  The 
machinery  for  coining  genuine  money  would  be  expensive,  the 
manufacture  of  dies  would  hardly  escape  notice,  and  if  these  diffi- 
culties were  surmounted,  that  of  getting  rid  of  any  amount  worth 
the  risk  would  arise.  The  movements  of  metals,  especially  of 
coins,  are  well  known,  and  any  interruption  in  their  ordinary  flow 
would  be  suspicious.  If  in  our  day  the  alchemist  could  realize  his 
dream  of  transmutation,  he  would  find  it  difficult  to  get  rid  of  his 
produce.  Let  me  illustrate  what  I  mean.  Perhaps  the  University 
Press  requires  about  £200  a  week  in  silver  money  for  wages.  The 
efflux  and  influx  of  this  silver  money  is  as  well  known  and  provided 
for  as  a  Great  Western  train.     Conceive,  for  a  moment,  that  the 


BIMETALLISM.    GBESHAM'S  LAW,  191 

local  operation  suddenly  ceased,  and  the  Press  went  on  paying 
wages  as  usual,  no  one  knowing  where  it  got  its  silver  coin  from. 
The  mystery  would  be  soon  followed  by  suspicion,  the  suspicion 
would  be  followed  by  inquiry,  and  the  Mint  would  discover  the 
origin  of  the  new  process.  I  am  convinced  that  the  authorities  of 
this  department  would  have  a  quicker  scent  after  such  an  affair 
than  the  Ordnance  had  after  the  origin  of  the  flexible  bayonets  and 
the  fragile  swords. 

I  may,  on  a  future  occasion,  find  it  in  my  power  to  deal  with 
the  question  of  bimetallism,  i.e.,  of  the  simultaneous  legal  tender  of 
two  different  metallic  currencies.  The  subject  is  exercising  a  goou 
deal  of  ingenuity  at  present,  and  though  I  have  not  heard  that  any 
person  of  eminence  in  monetary  science  or  finance,  or  even  in  the 
bullion  trade,  has  declared  his  adhesion  to  the  theory,  it  is  sup- 
ported by  names  respectable  enough  for  consideration.  It  is  due 
to  such  persons  that  the  theory  should  not  be  put  off  in  an  obiter 
dictum.  But  thus  much  is  certain.  It  is  necessary,  before  an 
opinion  is  formed  on  the  subject,  which  is  entitled  to  serious  dis- 
cussion ;  first,  that  much  more  should  be  known  of  the  historical 
ratios  of  the  two  metals  than  has  hitherto  been  collected ;  next, 
that  a  careful  estimate  should  be  formed  of  what  are  the  real 
forces  of  a  government,  which  is  invited  to  give  an  artificial  value 
to  any  of  its  coins ;  and  next,  if  it  be  found  necessary,  as  most 
advocates  of  bimetallism  confess,  that  there  should  be  not  an 
understanding  only,  but  a  binding  agreement  among  civilized 
countries,  as  to  the  limits  on  the  issue  of  an  overvalued  currency, 
what  is  the  machinery  by  which  they  expect  that  the  agreement 
will  be  enforced.  I  will  not,  however,  on  this  occasion,  pursue 
the  subject  further. 

Now  reverting  to  the  statements  which  I  made  in  the  early  part 
of  this  lecture,  the  gradual  degradation  of  the  penny  in  weight  be- 
tween 1297  and  1600,  most  people  who  have  dealt  with  prices 
imagine  that  payments  are  made  by  tale,  and  that  these  prices,  in 
so  far  as  details  were  known  to  them,  accommodated  themselves  to 
the  new  and  degraded  coinage,  that  of  course,  in  accordance  with 
Gresham's  law,  that  an  overvalued  and  an  underrated  currency 
never  circulate  simultaneously  in  a  country,  but  that  the  un- 
dervalued ones  instantly  disappear,  immediately  on  the  appearance 


192  METALLIC  CUBBENCIE8. 

of  the  new  and  degraded  coins,  the  better  currency  being  hoarded 
or  exported.      This   was   Adam   Smith's  opinion.      He   thought 
that  during  the   fifteenth   century   silver  was  gradually  getting 
dearer,  and  that  prices,  without  let  or  complaint,  at  once  accom- 
inodated  themselves  to  the  new  and  lighter  coin.     Now  Smith  had 
scarcely  any  information  on  prices.     All  that  had  been  published 
in  his    day  was   Bishop  Fleetwood's    ''  Chronicon    Preciosum." 
Fleetwood  had  been  a  fellow  of  Eton,  and  in  his  day  was  fond  of 
studying  finance.    He  had  a  reputation,  and  a  fellow  of  All  Souls, 
who  had  a  private  estate  of  over  £5  a  year  (the  limit  which  the 
founder  allowed  to  his  fellows),  and  was  therefore  threatened  with 
a  declaration  that  his  fellowship  was  vacant,  consulted  Fleetwood 
as  to  what  should  in  equity  be  the  interpretation  of  £5  in  Henry 
the  Sixth's  time,  according  to  prices  in  the  reign  of  Anne.     Fleet- 
wood answered  this  case  of  conscience  by  collecting  what  informa- 
tion he  could  procure,  or  thought  necessary  for  the  contrast,  and 
published  his  results.     For  a  long  time  his  book  was  the  only 
authority  on  the  subject,  and  the  Eton  wheat  and  malt  prices  were 
frequently  referred  to  in  Parliament  and  by  authors,  such  as  Adam 
Smith,  who  printed  them.     The  work,  as  far  as  the  fellow  of  All 
Souls  was  concerned,  was  published  in  vain.     The  fellows,  as  I 
learn  from  Hearne's  Diary,  rightly  declared  his  place  vacant.     The 
discovery  was  a  shock  to  me,  as  I  had  to  give  up,  among  the 
**  Worthies  of  All  Souls,"  what  I  had  imagined  was  a  conscientious 
worthy.    But  as  for  Fleetwood's  facts,  I  can  allege  that  I  have 
printed  more  information  on  prices  for  any  one  year,  than  can  be 
found  in  the  whole  of  Fleetwood's  collection. 

Now  let  us  take  one  century,  the  fifteenth.  According  to  the 
table  which  I  gave  you,  in  1412,  Henry  IV.  took  a  sixth  part 
away  from  the  silver  pennies  which  he  issued,  as  compared  with 
those  put  into  circulation  by  Edward  IH.  in  135B.  In  1464, 
Edward  IV.  takes  away  a  fifth  of  what  was  contained  in  the 
penny  of  Henry  IV.,  and  these  are  part  of  a  series  of  changes 
which  at  the  last  date  had  reduced  the  penny  to  almost  exactly 
half  of  its  ancient  weight.  But  no  material  change  of  prices 
takes  place  in  England  for  the  280  years  during  which  the  re- 
ductions in  weight  were  made.  No  change,  which  is  still  more 
remarkable  takes  place  in  the  years  which  follow  the  change. 


PAYMENTS  MADE  BY  WEIGHT,  NOT  TALE.  193 

Between  1410  and  1414  inclusive,  prices  of  com  are  singularly 
uniform,  between  1462  and  1467  inclusive,  they  are  nearly  as 
uniform.  Twopence  are  taken  out  of  the  shilling  on  the  first 
occasion,  nearly  2|^d.  on  the  second,  but  prices  remain  low.  The 
prescience  which  could  have  made  such  a  reduction  and  could 
have  foreseen  that  no  effect  would  have  been  induced  on  prices, 
would  be  simply  miraculous. 

But  the  patience  of  the  people  would  have  been  even  more 
remarkable.  Not  a  single  complaint  is  uttered  as  to  these  acts 
of  the  administration.  Henry  made  the  change  when  he  was 
peculiarly  unpopular ;  Edward,  when  he  had  just  obtained  his 
kingdom,  and  had  to  employ  all  his  energies  in  baffling  the 
intrigues  of  a  discontented  and  beaten  faction.  The  purchasing 
power  of  money  did  not,  it  is  true,  change  for  EngUsh  goods. 
Neither  did  it  for  foreign,  on  which  the  exchanges  would  be 
certain  to  operate.  But  every  one  who  knew  anything  about  it,  i.e., 
all  who  took  money  (for  it  was  a  period  when  money  scales  were  part 
of  the  furniture  of  all  houses),  must  have  known  that  within  52 
years  4|d.  worth  of  silver  had  been  taken  out  of  every  shilling. 
It  was  an  epoch  of  fixed  rents  and  of  fixed  dues.  There  was 
hardly  an  estate  from  which  one  or. more  pensions  did  not  issue, 
Agricultural  rents  from  tenants  at  will  or  on  lease  were  practically 
fixed.  Taxes,  tenths  and  fifteenths,  were  fixed  amounts.  It  is 
not  credible  that  the  king,  his  lords,  the  whole  body  of  land- 
owners, the  recipients  of  fixed  incomes  rising  from  land,  would 
have  acquiesced  without  a  murmur  in  an  operation  which  reduced 
those  incomes  nearly  40  per  cent.  The  old  money  too  did  not 
disappear.  No  one  says  it  did,  and  in  the  eighteenth  century, 
writers  on  the  exchanges  inform  us,  that  coins  of  the  Plantagenet 
kings  often  came  into  their  hands. 

The  English  people  were  by  no  means  patient,  especially  when 
their  pockets  were  affected.  They  hated  favourites,  who  got  hold 
of  the  king's  money,  with  exceeding  bitterness,  and  when  the 
king  was  incurably  bent  on  impoverishing  himself  they  were  very 
apt  to  depose  him,  and  acquiesce  in  his  rapid  disappearance.  All 
our  early  revolutions,  I  do  not  see  why  we  should  not  even  include 
the  later,  have  had  a  financial  or  economical  reason  at  the  basis 
of  them.     The  revolt  of  Tyler,  the  insurrection  of  Cade,  the  rising 

14 


194  METALLIC  CUBBENCIES. 

of  Ket,  in  the  fourteenth,  fifteenth,  and  sixteenth  centuries,  to 
say  nothing  about  the  Pilgrimage  of  Grace,  can  be  connected  with 
financial  and  social  discontent.  I  suspect  that  the  affair  of  1688 
was  quite  as  much  associated  with  economics  as  it  was  with 
religious  discontent.  The  philosophy  of  history  is  far  too  apt  to 
neglect  the  former  cause.  But  the  philosopher  has  the  excuse  of 
ignorance,  and  the  advantage  of  imagination. 

I  felt  convinced,  then,  that  the  view  commonly  taken  of  these 
successive  degradations  of  the  currency  was  an  erroneous  one, 
and  could  not  possibly  be  accepted.  To  be  true,  they  who 
manipulated  the  mint  must  have  been  preternaturally  wise,  or 
preternaturally  foolish,  and  though  the  English  race  is  not 
naturally  quick  or  inventive,  it  is  not  incapable  of  discovering  and 
avenging  a  grievance.  Now  the  conclusion  which  I  arrived  at, 
and  that  many  years  ago,  was  that  payments  were  made  by 
weight,  and  not  as  now  by  tale,  that  whatever  was  the  weight  of 
the  pieces  issued  by  the  Mint,  a  man  who  covenanted  to  receive 
or  pay  a  pound  of  silver,  for  goods,  services,  or  dues,  received  5,400 
grains  up  to  1527,  and  5,760  afterwards,  and  that  this  system 
lasted  from  the  earliest  records  down  to  the  restoration  of  the 
currency  under  Elizabeth.  On  no  other  hypothesis  could  the 
facts  be  interpreted,  and  the  question  before  me  was,  how  could 
the  hypothesis  be  verified  ? 

1.  The  history  of  general  prices  entirely  agrees  with  this 
hypothesis.  They  are  nearly  unchanged  for  280  years,  if  the 
whole  space  be  taken,  though  they  are  affected  for  a  time  by  such 
events  as  the  great  plagues  of  1848  and  1361,  when  the  value  of 
an  article  is  mainly  due  to  the  labour  expended  on  it.  Now,  wheat 
for  the  first  140  years  is  5s.  lOfd.  a  quarter,  i.e.,  from  1261  to  1400, 
and  5s.  llfd.  for  the  next  140  years  from  1401  to  1540.  On  the 
other  hand,  certain  prices,  notably  those  of  foreign  produce  and 
foreign  goods,  decline  rather  than  increase,  especially  toward  the 
conclusion  of  the  fifteenth  century.  Now  it  is  certain  that  there 
is  no  traceable  economy  in  the  cost  of  production,  and  no  dis- 
coverable reduction  in  the  cost  of  freight.  And  again,  English 
wool  is  rather  lowered  than  heightened  in  price,  though  there 
is  no  evidence  whatever  that  any  foreign  country  competed 
against  English  wool,  or  indeed  could  have  competed  against  it. 


BEASONS  PBOVING  THE  ABOVE.  196 

2.  The  price  of  silver  plate.  This  is  very  extensively  pur- 
chased. The  purchase  of  plate,  in  point  of  fact,  was  a  very 
common  kind  of  hoarding.  The  cost  of  shaping  it  was  low,  and 
the  article  was  readily  pledged  or  sold.  The  purchase  money 
is  constantly  expressed  in  pounds,  ounces,  and  pennyweights, 
the  raw  silver  or  finished  goods  being  plainly  weighed  in  the 
scale  against  coins  of  all  sorts  and  sizes.  Now  when  the  coins 
in  1462  had  been  reduced,  according  to  the  tale  theory,  to  a  little 
over  half  what  they  stood  at  in  the  earlier  ages.  Oriel  College,  in 
1493,  bought  33^  ounces  of  silver  plate,  some  of  which  was  gilt, 
at  2s.  9id.  an  ounce,  a  price  entirely  impossible  by  a  tale  payment, 
for  the  pence  and  farthing  fairly  represent  the  cost  of  workman- 
ship and  gilding.  I  might  multiply  evidence  of  this  kind,  for  I 
have  it  in  abundance,  and  it  all  points  to  the  conclusion  which 
I  have  arrived  at. 

3.  In  1462  gold  was  bought  at  30s.  the  ounce,  the  ratio  according 
to  Ending  between  the  two  metals  being  as  11*2  to  1  at  the  time. 
Such  a  price  is  intelligible  if  the  estimate  is  taken  by  weight, 
quite  inconsistent  with  the  facts  if  it  is  taken  by  tale. 

4.  We  are  expressly  told  that  the  principal  loss  of  the  base 
money  which  was  put  into  circulation  between  1548  and  1553 
inclusive,  and  remained  in  circulation  for  near  twenty  years,  fell 
on  those  who  lived  by  wages.  The  merchant  could  weigh  it 
and  test  it,  indeed  could  not  carry  on  his  business  unless  he  did, 
and  perhaps  gain  an  advantage  by  his  knowledge.  But  as  the 
issues  were  of  very  various  degrees  of  baseness,  the  man  who 
received  his  wages,  even  by  weight,  would  find  that  one  piece 
went  further  than  another,  owing  to  its  being  less  alloyed,  and  that 
another  was  almost  a  dead  loss. 

5.  The  record  of  the  restoration  by  Elizabeth  is  conclusive 
The  amount  of  base  money  which  Henry  and  his  son's  guardians 
put  into  circulation  was  631,950  lbs.  in  weight  The  currency 
value  was  £638,115,  the  difference  being  no  doubt  seignorage,  or 
a  charge  for  coining,  to  defray  mint  expenses.  The  amount  of 
silver  in  it  was  244,416  lbs.  indicating  a  debasement  of  near  60  per 
cent.  But  out  of  this  silver  Elizabeth  coined  by  tale  £733,248. 
She  said  she  lost  by  the  process,  though  there  seems  a  balance 
to    her  advantage  of  £95,133.      Whether  she  spoke  the  liters 


196  METALLIC  CUBBENCIES. 

truth  is  a  question,  which  some  persons  who  have  studied 
Elizabeth's  utterances  might  very  confidently  answer.  But  she 
had  to  refine  the  wretched  stuff,  and  the  separation  of  copper 
from  silver  was  in  that  day  by  no  means  an  easy  business,  and 
we  know  that  the  adulteration  was  copper,  from  stories  of  the 
time.  Then  there  was  the  charge  of  coining  and  the  seignorage. 
It  is  said  that  the  slag  was  intractable,  and  was  employed  to  mend 
the  roads. 

6.  There  is  no  reason  to  believe  that  the  Spanish  occupation 
of  Mexico  and  the  discovery  of  Potosi  were  followed  by  any 
notable  influx  of  silver  into  England.  It  is  only  by  the  foreign 
exchanges,  i.e.,  by  trade,  that  these  exchanges  can  operate,  and  in 
the  sixteenth  century  English  trade  was  exceedingly  curtailed. 
Now  the  rise  in  the  price  of  commodities  between  the  date  at 
which  the  currency  was  reformed,  and  the  period  at  which  the 
new  silver  unquestionably  began  to  modify  English  prices,  is 
exactly,  or  almost  exactly,  the  difi'erence  between  the  old  or  Tower 
pound  with  the  old  prices  by  weight,  and  the  new  prices  275  to 
1.  When  the  reform  was  over  Elizabeth  was  evidently  aghast 
at  tlie  coii^equ^-nces.  She  could  not  afford  to  make  good  the 
fraud  committed  in  her  father's  and  brother's  reign.  To  have 
done  so  wo  aid  have  cost  her  at  least  six  years  of  her  average 
income,  an  impossible  sacrifice,  for  in  strict  justice,  the  bank- 
ruptcy of  the  exchequer  was  more  thorough  than  at  any  period 
of  English  history.  She  did  bethink  herself  of  a  plan.  A  pro- 
clamation was  drafted  (or  copy  of  it  is  in  existence  in  the  great 
collection  of  her  proclamations)  reducing  the  tale  value  of  the 
new  coins  50  per  cent.  But  it  was  never  issued,  I  presume 
because  she  was  advised  that  it  was  sure  to  be  misinterpreted. 

I  may  seem  to  have  spent  too  much  time  and  given  too  many 
proofs  of  my  hypothesis.  But  the  issue  before  me  is  considerable. 
On  the  truth  of  my  hypothesis,  entirely  verified  as  I  think  it  is, 
depends  the  rational  interpretation  of  English  prices,  and  the 
significance  of  the  first  departure  from  them  after  1563.  How 
significant  prices  are  in  the  economical  interpretation  of  history  is, 
I  trust,  by  this  time  fully  clear  to  you.  It  is  because  Currency  is 
practically  unchanged  in  English  history,  except  at  one  important 
epoch,  that   it  is  possible  to  construct  an  intelligible  history  of 


THE  DEBASEMENT  BY  HENRY  VIIL  197 

prices  in  Eogland.  In  other  European  countries  despotism  has 
played  fast  and  loose  with  the  currency.  The  pound  was  the  unit 
in  France  as  well  as  in  England.  The  late  currency  of  Elizabeth 
reduced  it  to  a  third  of  its  ancient  and  traditional  value.  The 
French  livre  is,  now  under  the  name  of  the  franc,  l-72nd 
part  of  its  original  value.  In  Scotland,  which  was  a  despotism 
tempered  with  assassination  during  the  reigns  of  the  earlier 
Stuarts,  it  sank  to  a  twentieth.  But  I  think  it  would  have  been 
dangerous  had  any  English  monarch  played  the  pranks  which 
John  the  Good,  as  they  called  him,  in  France  did.  The  English 
people  have  been  slow  to  move  or  to  be  roused.  It  is  exceedingly 
difficult  to  determine  when  they  are  roused.  But  history  proves 
with  great  frequency  how  dangerous  they  are  when  the  unexpected 
occurs. 

The  debasement  of  the  currency  was  only  deliberately  committed 
once.  The  patriot  king,  after  squandering  all  that  he  could  get 
hold  of,  after  ruining  his  people,  after  pledging  himself  that  if  they 
gave  him  the  monasteries  he  would  ask  his  Parliaments  for  no  more 
grants,  ordinary  and  extraordinary,  began  to  debase  the  currency. 
Mr.  Froude,  the  apologist  of  this'  monster,  the  type  of  the 
philosophic  historian,  and  at  present  the  advocate  of  tlie  Liberty 
and  Property  Defence  League,  has  described  this  transaction  as  of 
the  nature  of  a  loan.  How  obliged  coiners  and  smashers  must  be 
to  him  for  so  courteous  a  description  of  their  calling !  Most  of 
ua  are  accustomed  to  consider  the  coiner  of  base  money  as  a 
peculiarly  scoundrelly  criminal,  because  the  success  of  his  calling 
depends  mainly  on  his  being  able  to  cheat  the  poor.  Except  by 
the  magnitude  of  his  crime,  Henry  is  on  a  level  with  the  meanest 
of  knaves.  The  crime  is  heightened  by  the  fact  that  it  is  the  first 
duty  of  a  ruler  to  keep  the  currency  up  to  standard.  Such  men 
as  our  Henry  the  Eighth,  and  such  men  as  Ernest  of  Saxe  Coburg, 
who  was,  I  believe,  the  last  European  sovereign  who  issued  base 
money,  and  repudiated  it,  ought  to  be  gibbeted  in  history. 

At  first  the  increase  of  debasement  was  not  large.  The  standard 
is  111  in  12.  The  issue  of  1543  was  10  in  12.  In  1545  it  became 
only  6  in  12.  In  1646  it  was  4  in  12,  two-thirds  being  alloy.  Tn 
1549  Somerset,  Edward's  guardian,  put  out  an  issue  of  6  in  12, 
and  in  1551  one  of  3  in  12.    This  was  virtually  the  last  issue  of 


198  METALLIC  CUBBENCIES. 

base  money.  The  credit  of  the  country  was  entirely  gone,  and 
Gresham,  the  king's  agent  at  Antwerp,  plainly  told  the  Court  that 
such  was  the  fact,  formulating  at  the  time  that  law  which  I  have 
quoted  to  you,  which  is  known  by  his  name,  that  if  two  currencies 
of  unequal  value,  but  declared  by  authority  to  be  of  equal  value, 
circulate  together,  the  undervalued  coin  is  sure  to  disappear.  Two 
issues,  one  nearly  up  to  sterling,  the  other  quite,  were  coined  in 
1552  and  1553,  not  for  circulation  in  England,  but  for  the  A^nt- 
werp  exchange.  Mary  would  have  restored  the  currency,  but  all 
her  energies  were  occupied  in  restoring  the  old  religion.  She  died, 
the  day  of  her  death  being  long  kept  as  a  holiday,  under  the  decent 
pretext  of  its  being  the  date  of  her  sister's  accession,  and  Elizabeth 
restored  the  currency.  Since  that  time  it  has  never  been  debased, 
though  Charles  I.  was  with  difficulty  restrained  from  this  crime, 
for  which  he  had,  probably  from  the  constitution  of  his  moral 
nature,  a  strange  hankering,  for  Charles  would  have  rather  cheated 
his  subjects  than  have  oppressed  them,  for  this  is  the  meaning  of 
the  defence  made  for  him,  that  after  having  packed  the  court  and 
terrorised  the  judges,  he  preferred  to  proceed  by  the  letter  of  the 
law. 

Now  I  have  alluded  to  the  effect  of  the  foreign  exchanges.  "When 
countries  trade  with  each  other,  it  is  the  obvious  interest  of  mer- 
chants to  buy  as  well  as  to  sell,  because  under  such  circumstances 
they  make  a  double  profit  But  commercial  transactions — I  am 
taking  them  in  their  very  simplest  form — rarely  exactly  balance 
goods  against  goods.  There  is  a  difference.  Now,  from  early 
times,  these  differences  have  been  expressed  in  bills  of  exchange, 
ie.y  orders  on  the  person  who  owes,  to  pay  at  a  more  or  less 
deferred  date,  whatever  difference  is  due  and  accepted  by  him. 
From  very  early  times  it  has  been  found  profitable  for  certain  per- 
sons to  trade  in  these  bills  or  orders  or  acceptances,  and  traders 
have  found  it  convenient  to  recognize  such  intermediaries.  If  such 
brokers  of  bills  find  it  expedient  to  take  money  for  the  bill  when 
due  they  will  do  so,  but  like  merchants,  they  generally  find  it 
expedient  to  take  bills  against  bills,  because  there  is  a  double 
profit  on  the  transactions.  Now  it  is  by  these  instruments  that 
money  is  distributed  among  different  countries  which  have  trade 
relations,  because  at  times  it  is  more  expedient  to  take  money  than 


THE  FOBEIGN  EXCHANGEa.  199 

to  take  bills.  It  is  always,  for  example,  expedient  to  take  money 
from  a  country  which  obtains  from  its  own  mines  a  greater  supply 
of  the  precious  metal  than  it  needs  for  its  own  domestic  use, 
because  such  metals  are  cheaper  there  than  they  are  in  any  other 
place. 

Now  in  early  times  the  operation  of  the  foreign  exchanges  was 
very  marked  in  England.  Our  forefathers  had  two  kinds  of 
produce — the  one  a  monopoly,  wool ;  the  other,  a  most  important 
produce,  silver.  It  is  plain  that  the  principal  place  at  which  Eng- 
lish produce,  bills  for  England  and  bills  on  England  were  negotiated 
was  Antwerp.  But  after  it  became  dearer  to  get  silver  from  Eng- 
lish mines  than  elsewhere  this  trade  declined.  After  the  Flemish 
trading  cities  were  ruined,  the  trade  in  wool  declined.  After  the 
rise  in  prices  occurred,  unaccompanied  by  a  rise  in  wages,  profits, 
and  rent,  the  power  of  purchasing  foreign  goods  declined.  I  have 
no  doubt  that  in  EHzabeth's  reign  the  foreign  trade  of  England, 
and  by  implication  the  movements  of  the  currency,  were  not  a 
fifth  what  they  were  a  century  before.  Everybody  was  distressed 
who  had  fixed  or  quasi-fixed  incomes,  for  the  state  of  rural  society 
in  England  was  such  that  there  was  little  chance  for  competitive 
rents.  The  Oxford  and  Cambridge  Colleges  were  terribly  dis- 
tressed. They  cut  down  their  chapel  services,  for  all  that  may  be 
said  about  Elizabeth's  advertisements,  to  the  meanest  forms. 
They  ceased  to  buy  books.  They  abandoned  wine  for  small  beer, 
with  occasional  draughts  of  a  more  generous  malt  hquor.  The  varied 
and  more  unctuous  feasts  of  two  or  three  generations  before  were 
exchanged  for  plain  beef  and  mutton,  with  rations  of  salt  fish. 
The  spice  box  was  locked  up,  except  on  gaudies.  Their  diet  and 
life  would  have  rejoiced  a  protectionist  or  fair  trader,  for  it  was 
strictly  that  of  Horace's  Sabine.  But  it  must  be  doubted  whether 
the  protectionist  or  fair  trader  would  have  been  jubilant  with  their 
experiences.  Some  small  relief  was  given  to  the  colleges  by  the 
Act  of  1576,  under  which  a  third  of  their  rents  was  to  be  paid  in 
com,  at  the  best  price  of  the  day. 

In  the  seventeenth  century  prices  rapidly  rose,  and  the  mint 
began  to  coin  gold  extensively,  mainly,  I  suspect,  for  foreign  trade. 
Eents  at  last  began  to  rise,  but  only  as  a  consequence  of  prices, 
i,e,j  on  the  principle  of  Ricardo.     Payments  were  made  by  tale, 


200  METALLIC  CUBBENCIE8, 

and  at  last  a  new  trouble  came.  Towards  the  end  of  the  century 
it  was  found  that  the  dimensions  of  the  coin  were  shrinking,  that 
the  silver  money,  a  very  clumsy  product  of  the  mint,  was  worn 
and  clipped.  Every  day  it  was  getting  worse,  and  for  a  long  time 
pegple  puzzled  themselves  with  the  cause.  Some  said  it  was  the 
Jews,  and  that  Oliver  the  Usurper  had,  among  his  many  crimes, 
allowed  the  Hebrew  race  to  settle  in  England.  Some  said  it  was 
the  goldsmiths,  the  commercial  progenitors  of  our  London  private 
bankers,  probably  because  they  made  money  very  fast.  All  agreed 
that,  whosoever  began  the  mischief,  it  was  continued  by  starving 
wretches,  who  made  a  trade  by  selling  the  clippings.  The  men 
were  hanged  and  the  women  burned  by  dozens.  But  these 
remedies  were  ineffectual.  Half-crowns  were  clipped  into  shillings, 
shilUngs  into  sixpences,  and  sixpences  were  rapidly  becoming 
spangles,  before  Parliament,  which  always  will  try  punishment 
before  it  tries  remedies,  resolved  on  re-coining  and  reforming  the 
currency. 

There  arose  a  great  struggle.  An  attempt  was  made  to  degrade 
the  currency,  to  put  ninepennyworth  of  silver  into  a  coin  and  call 
it  a  shilling.  There  were  people  in  that  day  who  thought,  as  there 
are  people  in  our  time  who  think,  that  the  name  of  a  shilling  would 
be  same  as  the  fact  of  a  shilling.  But  fortunately,  Montague,  then 
Chancellor  of  the  Exchequer,  had  two  invincible  allies  in  the* 
Oxford  Locke  and  the  Cambridge  Newton,  for  the  two  Universities 
at  that  time  possessed,  and  to  some  extent  encouraged,  men  of 
proved  capacity.  So  the  new  milled  coin,  which  it  was  all  but  im- 
possible to  mutilate,  was  issued  in  full  weight  and  fineness.  It 
was  a  costly  piece  of  honesty,  for  the  charge  was  equal  to  two 
years  of  the  ordinary  revenue  in  time  of  peace.  Perhaps  had  the 
charge  been  exactly  anticipated,  it  would  have  been  too  much  for 
the  virtue  of  the  nation,  and  the  arguments  of  Locke  and  Newton. 
As  it  was,  never  was  expenditure  more  wisely  incurred.  It  main- 
tained public  faith,  and  it  afforded  an  invaluable  precedent. 

Since  the  re-coinage  at  the  end  of  the  seventeenth  century,  the 
country  has  always  kept  up  the  standard  of  its  metallic  currency, 
and  has  incurred  the  charge  of  wear.  It  has  found  it  possible  to 
do  this  without  so  much  hanging  and  burning  as  was  thought 
expedient  in  olden  days.    But  it  has  had  to  protect  itself  in  an  in- 


THE  BECOINAGE  OF  1696,  201 

direct  way.  It  first  of  all  made  silver  a  legal  tender  up  to  £40 
only,  and  subsequently  up  to  40s.  only.  It  then  very  much  over- 
valued silver,  making  it  a  token  coin  for  internal  circulation  only, 
and,  as  I  have  said,  for  small  amounts  only.  It  has  done  the  same 
with  its  copper  and  bronze  coinage.  This  was  in  1816.  But 
before  that  time  it  had  not  thought  of  large  payments  in  copper, 
and  made  no  provision  against  them.  When  Lord  Cochrane  was 
degraded  and  fined  £1,000  for  an  offence  of  which  he  was  after- 
wards declared  innocent,  his  admirers  subscribed  the  amount  of  the 
fine  in  penny  pieces,  took  them  to  the  Bank  of  England,  and  ob- 
tained a  note  in  exchange.  With  this  Lord  Cochrane  paid  the 
fine,  having  written  an  explanation  of  the  facts  on  the  back  of  the 
note,  and  some  reflections  on  the  Government  of  the  day.  The 
note  was  paid  into  the  Bank,  and  is  now  preserve!  as  one  of  the 
curiosities. 

In  1797  the  country  was  engaged  in  a  very  costly  war.  Pitt,  who 
hired  the  European  monarchs  in  succession,  and  made  very 
unsuccessful  bargains,  was  draining  every  sovereign  out  of  the 
country  to  pay  these  people  with.  The  Bank  could  find  no  more 
money,  and  Pitt  determined  to  establish  a  forced  paper  currency  by 
making  Bank  of  England  notes  a  legal  tender.  The  nature  and 
consequences  of  this  action  will  be  treated  of  in  my  next  lecture. 
Of  course  gold  was  hoarded,  and  disappeared  from  ordinary 
currency,  for  Gresham's  law  came  into  full  force.  This  state  of 
things  went  on  till  the  war  was  over,  and  longer.  Then  Peel,  who 
had  evidently  studied  the  precedent  of  1697,  determined  on  re- 
storing the  metallic  currency.  But  there  were  many  people  then, 
like  the  people  one  hundred  and  twenty  years  before,  who  thought 
that  the  name  of  a  sovereign  would  carry  the  fact  of  a  sovereign, 
and  wanted  to  reduce  the  weight  of  the  pound.  It  was,  I  am  sure, 
during  the  debates  on  that  subject  that  Peel  thought  out  that 
famous  question  of  his,  which  he  put  in  the  House  of  Commons, 
and  with  which  he  so  utterly  puzzled  his  audience.  The  question 
was,  What  is  a  pound  ?  The  answer,  I  am  giving  you  my  own, 
and  I  don't  think  a  better  can  be  given,  is  113^^^  grains  of  pure 
gold  in  a  coin.  Depend  on  it,  when  you  hear  people  talk  nonsense, 
you  can  often  dispose  of  them  by  asking  them  for  a  definition  of 
the  leading  words  they  use. 


202  METALLIC  CUBBENCIES, 

Almost  all  nations  but  ourselves  levy  a  seignorage  on  gold,  i.e., 
a  small  charge  for  coining.  Now  directly  a  coin  leaves  the  country 
of  its  origin  it  becomes  bullion,  a  piece  of  metal,  it  is  true,  of 
accredited  weight  and  fineness,  but  only  a  piece  of  metal.  Hence 
we  never  see  foreign  coins  circulating  in  England.  In  the  seven- 
teenth and  eighteenth  centuries  they  circulated  almost  as  freely 
as  English  gold  coins,  and  ordinary  Englishmen  knew  all  about 
pistoles  and  gold  crowns,  moidores  and  gold  ducats.  Of  course 
coinage  is  a  manufacture,  and  the  convenience  of  the  product  is 
such  that  it  will  bear  the  cost  of  manufacture.  We  might  put  a 
charge  on  the  process,  but  we  do  not,  and  there  must  be  an  ad- 
vantage in  the  practice.  As  it  is,  English  sovereigns  circulate  all 
over  Europe,  and  people  are  glad  to  take  them,  for  as  the  English 
people  pay  all  the  cost  of  wear,  the  foreigner  can  safely  take, 
circulate,  and  in  their  legitimate  use,  wear  them  down,  with  the 
certainty  that  he  will  sujffer  no  loss.  It  is  plainly  very  arguable 
whether  this  policy  is  a  wise  one,  i.e.,  whether  we  gain  or  lose  more 
by  our  liberality.  Certainly,  when  our  gold  coin  gets  worn,  and 
it  is  terribly  worn  now,  more  than  half  the  sovereigns,  and  more 
than  two-thirds  the  half-sovereigns,  being  below  the  legal  weight, 
people  will  discuss  the  seignorage  question.  But  it  always  ends 
in  the  public  purse  bearing  the  loss.  To  be  sure  we  have  a  great 
fund  for  the  purpose.  There  is  an  enormous  profit  made  on  the 
circulation  of  the  silver  and  bronze  currency,  and  in  my  opinion,  as 
I  have  said  elsewhere,  the  profits  on  this  subsidiary  currency 
ought  to  be  a  separate  account  at  the  Bank  of  England,  held  or 
invested  against  the  contingency  of  making  good  the  light  gold. 

An  eminent  friend  of  mine,  Mr.  Gladstone,  once  asked  me 
whether  I  thought  currency  or  love  had  made  most  maniacs.  I 
told  him  that  I  had  often  been  in  a  difficulty  about  his  question, 
and  in  my  mind  it  could  be  coupled  with  a  third  cause  of  lunacy, 
the  interpretation  of  unfilled  prophecies.  I  trust  in  what  I  have 
said  to-day  that  I  have  not  unsettled  any  of  your  intellects.  At 
the  conclusion  of  this  lecture,  I  must  however  say  a  word  or  two 
more  about  two  very  significant  and  important  facts  :  first,  the  two 
kinds  of  currency  ;  and  second,  the  effect  of  foreign  indebtedness 
on  trade  and  the  exchanges. 

Every  country  has  two  kinds  of  currency.    One  of  those  kinds  is  of 


SEIGNOEAGES  ON  COINS.  203 

very  large  amount,  thougli  the  amount  greatly  varies  in  different 
countries.  It  is  that  which  is  needed  for  internal  trade,  the  money 
which  we  carry  about  with  us,  as  we  want  to  use  it,  that  which  is 
employed  by  traders  and  manufacturers  in  their  business,  and  that 
which  is  kept  by  bankers  for  the  purpose  of  honouring  cheques 
drawn  on  them,  and  for  the  convenience  of  their  customers.  No 
one  knows  what  the  amount  is,  for  the  issues  of  the  mint  are  no 
guide,  since  the  sovereigns  may  go  out  of  the  country  ;  we  know  in 
a  rough  manner,  how  much  the  silver  and  bronze  is,  but  only  in  a 
rough  manner,  because  no  one  knows  how  much  of  the  silver  has 
been  sent  back  in  a  more  or  less  worn  condition  to  the  mint.  But 
estimates  have  been  made  that  there  is  in  the  United  Kingdom 
one  hundred  millions  of  gold  in  circulation,  thirty  millions  of 
silver,  and  ten  millions  of  bronze.  The  last  two,  for  the  reasons  I 
have  given,  are  rough  guesses,  but  the  third  is  based  upon  a 
principle. 

Economists  have  got  an  excellent  phrase,  *'  The  eflficiency  of  the 
currency."  But  like  many  of  their  forms,  even  the  best  of  them, 
it  requires  explanation.  By  the  efficiency  of  the  currency  is  not 
meant  the  number  of  economical  operations  a  piece  of  money 
satisfies,  that  is,  the  number  of  times  in  which  it  passes  from 
hand  to  hand,  for  currency  may  be  efficient  without  being  visible ; 
but  the  number  of  transactions  which  a  given  quantity  of  the 
precious  metals  will  sustain  in  the  aggregate.  In  England  these 
transactions  are  very  large,  larger  than,  perhaps,  in  any  country. 
But  the  quantity  of  gold  needed  for  them  is  smaller  than  in  any 
country  of  its  size.  In  France  it  is  reckoned  that  there  are  three 
hundred  millions  sterling  of  gold  in  circulation ;  in  Germany  as 
much.  But  it  does  not  by  any  means  follow  that  these  countries 
are  richer  than  England. 

The  other  kind  of  currency  is  tbat  needed  to  secure  the 
equilibrium  of  the  foreign  exchanges.  This  is  known  to  a  single 
sovereign,  for  it  is  to  all  intents  and  purposes  in  the  Bank  of 
England,  and  an  account  of  it  is  published  every  Friday.  It  is 
part  of  what  Smith  calls  the  money  of  the  great  mercantile  re- 
public, and  it  flows  in  and  out  of  the  country  with  perfect  fluidity, 
as  it  is  wanted  here  or  elsewhere.  If  we  want  to  get  it,  the  Bank 
of  England  raises  the  rate  of  discount.     This  operation  makes  it 


204  METALLIC  CUBBENCIE8. 

more  profitable  to  send  gold  here  than  to  send  bills,  and  the  gold 
comes.  Sometimes  a  country  is  in  great  straits  for  this  money. 
Then  it  sells  securities,  of  course  at  a  comparative  loss,  and  gets 
gold  for  them.  It  is  possible  that  its  securities  may  be  at  such 
a  discount,  that  it  cannot  negotiate  them.  In  such  a  case  it  must 
wait. 

The  other  point  is  the  effect  of  foreign  indebtedness  on  trade  and 
the  exchanges.  England  is  a  prodigious  creditor  on  other  countries. 
The  sum  which  other  nations  owe  English  people,  by  whom  I 
mean  the  whole  United  Kingdom,  is  incredibly  large.  The  interest 
on  these  debts  is  expressed  in  gold,  payable  in  gold ;  of  course  it  is 
paid  in  goods.  But  the  fact  that  this  indebtedness  exists  is  an 
enormous  strength  in  the  control  of  the  foreign  exchanges.  What 
it  is  on  the  trade  of  the  country,  on  its  imports,  and  on  the  in- 
ferences to  be  drawn  from  the  facts,  I  shall  show  you  hereafter,  I 
hope.  But  the  right  to  be  paid  in  gold  cannot  but  be  an  enormous 
lever.  It  must  greatly  increase  the  force  of  a  rise  in  the  rate  of 
discount.  I  have  good  reason  to  beHeve,  from  conversations  and 
correspondence  which  I  have  had  with  some  frie^dd  of  mine  in  the 
Bank  parlour,  that  they  are  not  as  yet  cognizant  of  the  force  which 
that  engine  possesses,  which  is  virtually  in  their  hands,  as  the 
agents  of  British  trade.  To  people  who  study  the  mechanism  of 
economic  operations,  who  avoid  metaphysics,  and  cling  to  facts, 
there  constantly  arise  before  their  view,  novelties  in  action  which 
are  profound  and  far-reaching.  I  am  sometimes,  as  an  economist, 
glad  that  the  forms  of  our  constitution  make  changes  slow.  One 
chafes  at  blunders  in  practice,  one  chafes  at  delays  in  the  remedial 
process  of  legislation  ;  but  perhaps,  on  the  whole,  it  is  better  to  be 
too  slow  than  too  fast,  even  when  we  are  exposing  an  error,  or 
pointing  out  the  inevitable  consequences  of  a  political  crime.  Of 
course  I  refer  to  economical  errors  and  economical  crimes.  The 
history  of  England  supplies  us  with  illustrations  in  plenty  of  both. 


X. 

PAPER  CURRENCIES. 

Ancient  banlc'r.g — The  Jews  of  Asia  Minor — Practices  precede  the 
mention  of  them — The  BanJc  of  Venice — The  Bank  of  Genoa — 
The  Bank  of  Amsterdam — Early  English  hanking — The  beginning 
of  the  Bank  of  England — The  relations  of  the  Bank  to  Goveryi- 
ment — The  powers  of  a  Bank  over  note  issues — The  Land  Bank 
of  1696 — Exchequer  Bills — The  first  hundred  years  of  the  Bank — 
The  crisis  of  1797— Sir  Eohert  Peel's  Act  of  1844— The  country 
hanks  of  issue. 

It  appears,  from  abundant  evidence,  that  substitutes  for  money, 
convertible  into  money  at  the  discretion  of  the  person  who,  holding 
them,  was  entitled  to  negotiate  them,  preceded  the  invention  of 
coined  money.  I  have  used  the  widest  expression  possible  when  I 
say  substitutes  for  money.  In  the  great  and  prolonged  controversy 
which  has  arisen  on  this  subject,  and  has  not  perhaps  been  con- 
cluded by  any  propositions  which  command  universal  assent,  much 
debate  has  arisen  as  to  what  substitutes  for  money  are  to  be  accepted 
as  performing  equally  effective  functions  in  the  world  of  commerce 
and  exchange.  The  debate  or  dispute  is  due  in  great  measure  to 
the  views  which  have  been  taken  as  to  the  State  regulation  of  sub- 
sidiary currencies,  and  to  the  reasons  which  have  been  alleged  for 
such  an  interference  with  free  action  in  such  matters.  If  the  regu- 
lation of  all  such  substitutes  is  to  be  assigned  to  the  State,  it  will 
be  plain  to  you,  in  the  course  of  this  inquiry,  that  the  action  of  the 
State  would  seriously  incommode  commerce,  while,  if  the  regula- 
tion is  to  be  applied  to  some  forms  of  substitution  only,  many  of  the 
arguments  which  have  been  alleged  as  conclusively  proving  the 
necessity  of  legislative  supervision  will  be  invalidated,  though  some, 


206  PAPEB  CUBRENCIE8. 

in  my  opinion  quite  as  forcible,  will  remain  unimpaired  in  their 
cogency. 

I  stated  in  my  last  lecture  that  modern  research  has  shown  that 
the  Babylonian  bankers  employed  instruments  of  commerce  which 
were,  to  all  intents  and  purposes,  substituted  currencies.  The  private 
orations  of  the  great  Greek  pleaders  are  full  of  information  as  to 
the  existence  of  bankers  in  the  Greek  cities,  and  of  the  circulation 
of  bills  of  exchange  between  such  bankers  as  were  in  correspondence 
with  each  other,  and  had  understandings,  as  to  the  negotiation  of 
such  instruments.  No  doubt  then,  as  now,  liabilities  were  ex- 
pressed in  money,  either  by  weight  or  tale,  and  in  theory  the 
debtor,  on  completing  the  transaction  in  which  he  was  engaged, 
was  under  the  obligation  in  theory  to  provide  at  Athens  or  ^gina, 
at  Corinth,  at  Carthage,  at  Tyre,  or  wherever  else  he  purchased, 
the  coins  or  bullion  in  which  he  expressed  his  debt.  But  in  practice, 
and  from  early  times,  even  times  of  prehistoric  trade,  the  practice 
was  different.  The  purchaser  had  his  debtors,  to  take  the  simplest 
form  of  these  transactions,  at  the  city  where  he  had  bought,  and 
had  previously  sold.  He  transfers  his  debtor's  liability  to  his  creditor. 
From  this  it  is  only  a  step  to  transfer  a  liability  in  another  trading 
centre,  with  which  that  in  which  he  deals  has  commercial  corres- 
pondence. When  the  next  step  is  taken,  and  particular  persons 
make  it  their  business  to  bring  together  these  debts,  to  negotiate 
them,  and  to  balance  them,  the  chain  is  complete,  and  the  system 
under  which  trade  is  carried  on  in  our  day,  and  was  carried  out  in 
the  remotest  ages  of  trade,  is  completed.  Delay,  risk,  trouble  are 
avoided,  and  you  are  well  aware,  I  trust,  that  in  every  economical 
operation,  they  who  are  engaged  in  it  do  their  best  to  avoid  to  the 
utmost  all  unnecessary  cost  and  risk.  We  may  be  sure,  then,  that 
the  use  of  letters  of  credit,  of  bills  of  exchange,  of  commercial 
transfers  from  account  to  account,  are  as  old  as  commercial  civili- 
zation is,  and  far  transcend  in  antiquity  all  surviving  records.  The 
origin  of  the  intercourse  between  Tyre,  Carthage,  and  Cadiz  or 
Gades,  is  lost  to  history.  But  it  certainly  existed  in  fact,  and  in 
the  form  which  I  have  sketched.  It  is  not  remarkable  that  the 
record  has  been  lost.  Commercial  transactions  lose  their  interest 
as  soon  as  they  are  balanced ;  and,  in  fact,  it  is  only  owing  to  a 
peculiarly  barbarous  tradition,  I  can  hardly  call  it  a  principle,  of 


ANCIENT  BANKING,  207 

the  English  conrts  of  law,  which  endured  to  less  than  two  genera- 
tions ago,  that  England  possesses  so  extraordinarily  large  a  record 
of  bygone  business  transactions.  I  am  alluding  to  the  old  rules 
which  regulated  or  defined  title  by  prescription.  If  economists  lay 
down  principles  to  which  they  claim  assent,  they  must  allege  that 
they  come  under  the  rule,  quod  semper^  quod  uhique,  quod  omnibus. 
But  the  facts  which  confirm  these  utterances  have  to  be  sought, 
and  are  not  always  easily  found. 

Cicero's  oration  in  defence  of  Flaccus,  who  was  accused  of  extor- 
tion in  Asia,  gives  incidentally  some  hints  as  to  the  movements  of 
specie,  under  the  agency,  as  is  obvious,  of  Jewish  bankers  or  bullion 
dealers.  It  appears  that  Flaccus  interfered  with  their  business  by 
prohibiting  the  exportation  of  specie  from  Asia  Minor,  and  that  the 
prosecution  laid  great  weight  on  the  praetor's  misconduct.  Of 
course  we  do  not  know  from  the  apologist  what  was  the  precise 
action  of  the  praetor,  beyond  inhibition  and  confiscation.  It  is 
pretty  certain  that  the  charge  made,  that  the  gold  was  to  be  sent 
to  Jerusalem,  is  an  exaggeration,  and  that  Cicero  is  trying  to  evade 
the  issue  by  appealing  to  Eoman  contempt  for  foreign  rites.  But 
he,  no  doubt,  states  the  fact  when  he  alleges  that  these  movements 
of  specie  were  carried  on  by  the  Jews,  nearly  sixty  years  before  our 
era,  not  only  in  Italy,  but  in  every  province  of  the  empire,  and  that 
to  interfere  with  these  transactions  was  to  provoke  powerful  enemies, 
not,  I  conceive,  so  much  among  the  Jews,  but  among  those  who 
recognized  the  advantage  of  this  bullion  trade.  In  the  nature  of 
things  these  transfers  must  have  been  assisted  by  commercial  in- 
struments. 

The  Greeks  called  a  banker,  TpairilirnQ ;  the  Eomans,  argentarius ; 
and  there  are  numerous  references  in  Greek  and  Latin  authors  to 
the  trade  and  customs  of  these  persons.  After  the  conquest  of  Egypt 
they  were  particularly  numerous  at  Alexandria,  then  the  most  im- 
portant commercial  city  of  the  Old  World,  and,  it  would  seem,  the 
centre  of  such  trade  with  the  remoter  East  as  was  carried  on  in 
those  distant  times.  But  with  the  violent  destruction  of  the  old 
civilization,  and  the  reduction  of  nearly  all  Europe  to  barbarism, 
the  old  system  is  forgotten,  and  reappears,  as  might  be  expected, 
in  Italy,  as  one  discovers  in  the  exceedingly  copious  records  of 
Muratori.    At  some  later  period  I  hope  to  explain  to  you  in  some 


208  PAPEB  CUBBENCIES. 

detail  what  was  the  position  of  the  Italian  city  in  the  early  Middle 
Ages.  My  information  will  come  principally  fi'om  the  author  to 
whom  I  have  referred.  I  have  little  doubt  that  this  commercial 
system,  undoubtedly  in  a  very  shrunken  form,  survived  in  Southern 
Italy  the  incursions  of  Saracen  and  Norman,  and  that  it  may  be 
possible  to  trace  the  commercial  law  of  the  remotest  ages  in  the 
records  of  those  trading  cities.  But  at  present  I  must  confine 
myself  to  the  development  of  modern  banking,  i.e.,  the  trade  in 
substituted  currencies.  You  will  understand  that  a  substituted 
currency  is  one  which  is  made  to  perform  the  functions  of  money 
for  a  longer  or  shorter  period.  Its  agency  may  be  momentary  or 
prolonged.  Its  conversion  into  money  may  be  immediate,  or  be 
deferred. 

Individual  enterprise,  in  matters  of  business,  almost  invariably 
precedes  partnership  business  ;  partnership  business  precedes  joint- 
stock  enterprise.  Joint  stock  precedes  State  enterprise.  But  the 
beginnings  of  all  enterprise  are  generally  obscure,  and  almost  in- 
variably unrecorded,  for,  as  I  said  just  now,  the  interest  in  a  com- 
mercial transaction  expires  with  its  completion.  Hence  we  may  be 
sure  that  when  action  like  that  on  which  I  am  commenting  attracted 
the  attention  of  the  contemporary  annalist,  it  had  long  been  pre- 
paring, and  possibly  long  in  action.  Besides,  a  successful  process 
is  a  trade  secret,  or  a  source  of  personal  profit.  If,  as  some  persons 
suggest, perhaps  with  an  imperfect  acquaintance  with  human  nature, 
the  State  is  so  successfully  manipulated,  that  competition  is  pro- 
scribed, you  may  be  pretty  certain  that  competition  will  reappear 
under  the  mask  of  secrecy.  I  am  well  aware  that  men  are  misled 
by  names,  but  we  economists,  and  with  reason,  distrust  all  names, 
and,  while  we  are  in  possession  of  our  wits,  refer  ourselves  to  things. 
Again,  as  society  is  rude,  violence  is  a  recurrent  risk,  and  success  is 
doubtful,  imitation  is  slow.  You  will  find,  especially  in  monetary 
science,  and  particularly  in  that  branch  of  it  which  I  am  handling 
this  morning,  that  the  wisest  and  most  useful  conclusions,  fortified 
by  abundant  experience,  are  very  slowly  adopted  by  other  nations 
than  those  who  have  tried  and  proved  them.  Had  I  time,  I  could 
point  out  to  you  how  many  instances  can  be  found,  in  the  economi- 
cal history  of  nations,  in  which  one  State  has  progressed  rapidlj^ 
and  others  have  gazed  on  them  with  amazement,  imagining  that 


THE  BANK  OF  VENICE.  209 

there  is  something  preternatural  in  their  doings  ;  and,  again,  how 
many  instances  there  are  in  which  they  who  know  what  is  best  to 
be  done  for  their  fellow-countrymen,  appeal  in  vain  to  these  facts, 
which  cannot  be  discerned  by  those  who  are  blinded  by  the  twin 
forces  of  ignorance  and  science.  To  the  votaries  of  these  obstruc- 
tive forces,  secrecy  is  opposed.  You  will  therefore  understand 
that,  when  I  give  you  an  early  date  for  an  economic  practice,  I 
give  you  the  date  of  observation,  not  that  of  origin. 

With  this  caution,  then,  I  may  say  that  the  State  Bank  of  Venice, 
the  earliest  of  these  modern  institutions,  was  founded  in  1171.  This 
was  during  the  time  when  Pope  Alexander  IIL  was  engaged  in  a 
perpetual  quarrel  with  Barbarossa,  and  the  two  Italian  factions  of 
Guelfs  and  Ghibellines  were  being  consolidated.  Now  Venice,  which 
cared  nothing  for  Pope  or  Emperor,  except  in  so  far  as  it  could  get 
advantage  from  either,  had  at  this  time  almost  a  monopoly  of  trade 
with  the  East.  Other  nations  had  fought  the  Crusades,  and  founded 
the  kingdom  of  Jerusalem,  but  Venice  traded  with  Christian  and 
payuim.  The  city  grew  rich  and  powerful,  and  you  will  often  find 
that  when  people  are  rich  and  powerful,  their  orthodoxy,  and  even 
their  morals,  are  not  weighed  with  exceeding  scruple.  At  this  time 
many  hard  things  were  said  of  the  Venetians,  but  everybody,  espe- 
cially those  who  had  need  of  their  services,  financial  or  diplomatic, 
had  dealings  with  the  Venetians.  They  took  all  currencies  that 
came  to  them  in  course  of  business,  and  they  secured  a  profit  on 
all  the  business  they  did.  I  should  weary  you  if  I  gave  you  a  tithe 
of  the  names  which  belonged  to  the  coins  then  congregated  at 
Venice.  They  were  more  numerous  than  the  nationalities,  for  the 
style  or  effigy  of  many  a  forgotten  monarch,  from  Bactria  to  Mauri- 
tania, from  the  caliphs  of  Spain  to  the  dukes  of  Moscow,  were  in 
the  Venetian  treasury. 

Venice  took,  sorted,  valued,  and  discounted  them  all.  An  ex- 
perience of  the  gain  derived  from  these  processes  led  them  to  the 
discovery  of  giving  a  ticket  to  depositors  who  were  waiting  for 
purchases  or  sales.  It  is  not  wise  to  carry  much  money  about  with 
one,  even  in  these  days,  it  was  less  wise  in  those  days.  Very  soon 
the  ticket,  really  a  warrant,  implying  that  the  depositor  had  a  right 
to  the  coins  specified  or  endorsed  on  the  document  given  to  the 
depositor,  was  found  to  be  as  good  as  cash,  even  better,  for  it  was 

15 


210  PAPEB  CUBBENCIE8. 

a  better  security.  Very  soon  the  Venetian  note  bore  an  agio  or 
premium,  and  a  bank  of  deposit  was  formed.  Very  soon  the  bank, 
to  encourage  deposits,  gave  privileges  to  its  customers,  or,  which  is 
the  same  thing,  put  disabiUties  on  those  who  were  not  its  customers, 
as,  for  example,  they  declined  to  permit  bills  of  exchange  to  be 
negotiated  or  discounted,  except  at  their  bank,  or  stayed  process 
against  the  acceptor  of  the  bill,  that  is,  the  person  liable,  until  his 
bill  was  protested,  that  is,  the  non-fulfilment  of  his  obligation  was 
sworn  before  a  notary  public,  that  is,  one  of  their  own  licensed 
officials.  The  Queen  of  the  Adriatic  soon  learnt  how  to  give 
stability  to  its  own  institutions,  and  to  suggest  instability  on  those 
which  were  not  its  own.  But  I  need  not  follow  the  fortunes  of  the 
Bank  of  Venice. 

We  get  on  more  solidly  chronological  ground  when  we  come  to 
the  Bank  of  Genoa,  founded  in  1407.  At  this  time,  the  Western 
world,  or  rather  the  potentates  of  Western  Europe,  were  near  on 
reducing  the  Pope,  who  had  so  long  terrified  them,  to  the  condition 
of  a  nominee,  holding  office  during  pleasure,  nominally  of  a  general 
council,  really  of  themselves — for  laymen  sat  in  the  councils  of  the 
early  fifteenth  century.  The  scheme  failed,  for  reasons  on  which  I 
need  not  dwell  here.  To  some  extent  the  Pope  recovered  his  own, 
though  never  to  such  an  extent  as  to  make  an  anti-pope  a 
practicable  expedient.  But  the  power  of  the  kings  increased. 
It  was  just  the  time  in  which  a  bank  on  the  Western  Coast 
of  Italy  had  good  prospects  of  business,  and  the  Genoese  char- 
tered A  company  lor  the  purpose,  gave  it  immediate  privileges, 
and  gradually  increased  these  privileges.  At  last  the  Bank 
of  Genoa  became  an  imyerium  in  imperio,  which  made  conquests 
of  its  own,  and  negotiated  independently  with  foreign  Powers. 
It  existed  as  a  shadow  down  to  the  end  of  the  eighteenth 
century. 

The  Bank  of  Genoa  was  not  one  of  deposit.  It  did  not  purport 
to  secure  to  the  depositor  the  exact  moneys  which  it  had  put  into 
the  Bank,  earmarked,  so  to  say,  for  him.  It  took  his  money,  gave 
him  an  acknowledgment  in  the  shape  of  a  note,  which  was 
transferred  from  hand  to  hand,  pledged  its  credit  that  it  would 
repay  him  on  demand,  and  traded  or  made  acquisitions  with  its  own 
capital  and  that  of  its  customers.  Through  the  fifteenth  and  sixteenth 


THE  BANK  OF  GENOA.  211 

centuries  the  Bank  of  St.  George  was  and  remained  a  very  thriving 
undertaking.  The  trade  with  the  East  through  Alexandria  was  very 
prosperous  during  the  fifteenth.  The  Western  Mediterranean,  to  all 
appearance,  became  exceedingly  rich  and  powerful  during  the  six- 
teenth. The  gift  of  Borgia  seemed  inexhaustible,  and  when,  under  a 
succession  by  marriage,  Philip  II.  got  possession  of  Portugal, 
with  its  vast  Indian  possessions  and  their  illimitable  resources, 
Philip  and  the  Inquisition  seemed  destined  to  dominate  in  Europe, 
and  become  the  masters  of  the  human  race.  To  discount  the 
bills  of  so  rich  a  potentate  as  Philip  seemed  to  be  good  business. 
Spinola  told  the  Genoese  it  was,  and  the  Bank  and  the  merchants 
competed  for  Philip's  paper.  I  know  nothing  which  would  interest 
me  more  than  to  discover  the  rates  at  which  they  discounted  it. 
They  were  probably  high,  at  least  Philip  said  so,  when  he 
repudiated  his  debts  in  1596,  ruined  the  Bank,  ruined  the 
merchants,  and  left  Spinola  as  best  he  could  to  finish  the  siege  of 
Ostend.  In  war,  especially  in  a  war  which  supports  itself,  every- 
body but  the  warrior  may  be  ruined.  This  unequal  arrangement 
still  subsists. 

Philip,  as  we  all  know,  was  impoverished,  and  with  him  the 
country  which  he  misgoverned,  by  his  attempt  to  subjugate  the 
Dutch.  The  resistance  of  Holland  was  infinitely  more  significant 
than  the  resistance  of  Athens  more  than  2000  years  before.  The 
collapse  of  Philip  was  far  more  complete  than  the  collapse  of 
Xerxes,  for  it  took  near  fifty  years  of  his  and  his  son's  reign,  and 
was  of  infinite  value  in  training  the  Hollanders.  Towards  the 
very  end  of  the  struggle  the  Dutch  determined  on  establishing  a 
bank.  They  did  not,  in  1609,  take  the  precedent  of  Genoa,  for  its 
experiences  were  not  encouraging.  They  also  established  a  bank 
of  deposit  on  the  model  of  the  old  Venetian  bank,  and  shortly 
afterwards,  Hamburg,  the  only  Hanse  town  which  retained  its  old 
prosperity,  followed  the  Dutch  example.  It  will  be  remembered 
that  at  this  time  Amsterdam  was  the  Exchange  of  Europe,  as 
Venice  had  been  during  the  time  of  the  Crusades.  It  rose  by  its 
own  heroism  and  strength,  and  on  the  ruin  of  Antwerp :  I  regret  to 
say  that  England,  which  owes  more  to  the  Hollanders  than  it  does  to 
any  other  race,  never  ceased  intriguing  till  it  ruined  Holland  and 
the  Bank.  The  process  was  aided  by  Dutch  unwisdom.  The  Dutch, 


212  PAPEE  CUBBENCIES. 

for  reasons  into  which  I  cannot  now  enter  (though  the  burgomasters 
of  Amsterdam  and  its  council  took  oath  annually  that  the  treasure 
was  intact,  and  were  confirmed  by  the  evidence  of  1672,  when  the 
De  Witts  were  murdered,  and  there  was  a  run  on  the  Bank,  but 
the  treasure  was  found  intact),  borrowed  the  capital  in  the  succeed- 
ing century  for  the  Dutch  East  India  Company.  "When  the  French 
invaded  Holland  in  1795,  and  perhaps  expected  the  reward  of 
patriots  in  the  cellars  of  the  Bank,  they  were  found  empty. 
But  Adam  Smith,  when  he  wrote  his  *'  Wealth  'of  Nations," 
thought  that  an  account  of  the  Bank  of  Amsterdam  was  more 
interesting  than  that  of  the  Bank  of  England,  and  got  Mr. 
Hope,  a  Dutchman  of  Hebrew  descent,  and  ancestor  to  some 
distinguished  English  Churchmen,  to  give  him  a  **  digression  ^ 
on  it. 

Private  banking  preceded,  as  usual,  joint-stock  banking  in 
England.  In  the  seventeenth  century  the  wealth  of  England  was 
centred  in  London.  The  goldsmiths,  members  of  the  most 
opulent  and  enterprising  of  the  City  Companies,  who  had  lent 
much  to  Charles,  became  wealthier  under  the  Protectorate  than 
under  the  monarchy.  Cromwell's  government  was  strong,  and 
strong  governments  seem  to  be  safe,  while  safe  governments 
attract  the  wealth  of  the  timid.  Already  during  Cromwell's  reign 
the  project  of  a  Corporation  bank  was  mooted,  and  the  Bank  of 
Amsterdam  was  the  obvious  model.  But  corporations  in  a 
republic  are  much  more  secure  than  corporations  under  a 
monarchy.  During  the  Protectorate  the  London  Corporation  was 
respectable,  and  remained  respectable  for  a  century  or  more  after 
the  Protectorate.  But,  as  the  surrender  of  the  Charters  proved,  it 
was  not  safe.  The  opponents  of  the  Bank  of  England  were  never 
tired  of  saying  that  a  public  bank  and  monarchy  were  in- 
compatible. They  certainly  were  if  the  monarch  was  a  Stuart. 
With  these  people  nothing  was  sacred,  nothing  safe.  In  1638 
Charles  I.  stole  the  money  in  the  Mint,  £204,000.  In  1672, 
Charles  II.  stole  the  money  in  the  Exchequer,  £1,328,526.  The 
father  paid  the  money  back,  for  he  found  that  it  would  be  unwise 
to  keep  it.  The  son,  who,  Eochester  said,  never  did  a  wise 
thing,  neither  paid  principal  nor  interest.  In  such  times, 
and  under  such  kings,  it  would  have  been  as  unsafe  to  estab- 


THE  BANK  OF  AMSTEBDAM.    ENGLISH  BANKING.     213 

lish  a  bank  as  it  would  have  been  to  entrust  the  Exchequer  to 
Fal?taff.  The  only  chance  for  a  bank  was  a  revolution.  It  came 
in  1688. 

No  doubt  the  project  of  founding  a  joint-stock  bank  in  London 
was  in  every  one's  mind  as  soon  as  the  Government  was  settled, 
and  James  was  driven  from  Ireland.  But  the  projectors  of  the 
institution  might  well  have  hesitated.  The  business  of  banking, 
and  that  a  very  lucrative  business,  was  in  the  hands  of  wealthy 
men,  who  had  a  common  interest  in  keeping  it.  The  bankers, 
then  called  goldsmiths,  took  the  money  of  such  among  their 
cnstomers  as  wished  to  find  a  safe  place  of  deposit — no  easy 
discovery,  for  after  the  Kestoration  London  swarmed  with 
footpads  and  highwaymen — and  gave  acknowledgments  of  the 
deposit  in  the  shape  of  notes.  These  notes  passed  freely  from 
hand  to  hand,  were  indeed  a  favourite  instrument  of  business  and 
trade,  as  they  were  portable,  were  easily  traced,  and,  if  they  fell 
into  wrong  hands,  could  at  least  be  stopped,  and  very  probably 
recovered.  The  goldsmiths  soon  discovered  that  they  could  issue 
notes,  the  amount  of  which  was  far  in  excess  of  the  money  which 
they  ordinarily  held,  if  the  issuer  was  known  to  be  solvent,  and 
could  thus  carry  on  a  business  by  their  own  credit.  This  peculiarity 
of  the  new  system  was  perfectly  well  known  and  recognized  at  the 
time,  as  may  be  gathered  from  contemporary  pamphlets.  But 
besides  the  profit  derivable  from  these  issues  of  credit,  which 
fulfilled  to  the  goldsmith  and  the  trader  all  the  functions  of  money, 
these  persons  derived  a  very  great  profit  from  the  discount  of 
foreign  bills.  The  exchange  between  England  and  Holland  was 
subject  to  very  violent  fluctuations,  fluctuations  which  seem 
incredible  to  modem  experience,  as  they  .are  without  parallel  in 
recent  times.  But  two  centuries  ago,  the  chances  of  exceptional 
profit,  especially  in  foreign  articles,  was  very  great.  Within  a  few 
months  such  an  article  might  rise  to  a  price  treble  that  at  which  it 
ordinarily  stood,  and  though  the  trader  might  be  certain  that  it  would 
not  fall  below  a  certain  rate,  the  speculation  in  a  rising  market,  if 
the  trader  had  money  or  credit,  was  generally  safe,  and  might 
assure  a  gigantic  profit.  With  such  prospects,  the  trader  might 
endure  complacently  such  a  rate  of  exchange  on  his  bills  as  would 
be  ruinous  to  his  modern  successor.      For  example,  the    chief 


214  PAPER  CURRENCIES. 

supply  of  saltpetre  was  from  the  East  Indies.  Its  price  was  open 
to  great  changes,  as  the  demand  of  war,  or  the  safe  return  of  the 
East  India  ships  were  announced.  It  more  than  doubled  in  price 
in  a  week.  Now  the  trader  who  knew  what  ships  were  afloat 
might  reasonably  calculate  on  his  profits  for  a  time,  and  might,  if 
he  were  quick,  get  a  monopoly  of  the  market.  It  was  by  such 
bargains  that  the  great  fortunes  of  this  period  were  made. 

The  exigencies  of  the  Government  were  the  opportunities  of 
those  who  were  projecting  the  Bank,  and  Montague,  who  had 
ulterior  motives  in  encouraging  the  projectors,  was  quite  ready  for 
negotiations  in  1694.  William  had  determined  if  possible  to  rival 
the  victory  of  La  Hogue  by  a  land  campaign,  and  had  planned  the 
siege  of  Namur.  But  the  expenses  of  the  war  were  great.  The 
country  gentlemen  had  granted  the  land  tax,  then  a  great  sacrifice. 
Montague  raised  a  million  by  a  lottery,  and  gave  a  charter  to  an  in- 
corporation of  bankers,  on  consideration  of  a  loan,  to  be  raised  within 
a  brief  time,  of  £1,200,000  at  7  per  cent.  The  whole  was  subscribed 
in  a  few  days.  The  new  incorporation  received  deposits  and  issued 
notes,  in  imitation  of  their  rivals,  the  goldsmiths.  They  expected 
to  pay  their  dividends  from  the  interest  paid  by  Government,  from 
the  profits  of  their  own  issues,  acting  as  money,  from  the  employ- 
ment within  safe  lines  of  their  customers'  deposits,  and  from  the 
discount  of  bills.  In  short,  they  strove  to  get  hold  of  the  gold- 
smiths' business,  and  they  had  to  expect,  and  did  experience,  the 
goldsmiths'  enmity.  This  is  not  the  occasion  on  which  to  deal  with 
the  early  struggles  and  rapid  success  of  the  Bank  of  England.  I 
have  told  the  story  of  its  first  nine  years  in  a  volume  recently  pub- 
lished, the  occasion  of  which  was  my  discovery  of  a  price  list  of 
Bank  Stock,  printed  weekly  in  Houghton's  Collections.  The  Bodleian 
Library  has  a  perfect  copy  of  this  remarkable  periodical.  The 
British  Museum,  as  I  found  from  a  recent  inquiry,  has  only  an  im- 
perfect copy.  I  suspected  that  the  National  Library  was,  in  this 
particular,  not  so  well  off  as  we  are,  from  the  slighting  manner  in 
which  Macaulay  treats  Houghton's  labours.  It  would  have  been  of 
great  value  to  the  historian  if  he  had  seen  the  Bodleian  copy. 

The  peculiarity  of  the  government  of  the  Bank  of  England,  from 
its  inception  and  for  many  years  after  its  business  commenced,  was 
that  the  management  was  entirely  in  the  hands  of  Whigs  and  Dis- 


THE  BEGINNING  OF  THE  BANK  OF  ENGLAND.      215 

senters.Sir  John  Houblon,  the  first  Governor,  two  of  his  brothers 
being  in  the  direction,  was  the  descendant  of  a  Flemish  refugee, 
who  had  fled  to  England  from  Alva's  persecution.  From  the 
correspondence  of  Pepys,  preserved  in  our  library  in  the  Rawlin- 
son  Collection,  it  is  clear  that  Houblon  was  a  general,  but  especially 
a  timber  merchant,  for  though  Pepys  chiefly  writes  to  him  about 
ship  stores,  he  gets  him  to  perform  certain  commissions,  chiefly  in 
dress,  for  Mrs.  Pepys,  the  lady  whom  he  appears  to  have  treated 
with  great  consideration,  though  he  writes  of  her  with  much  dis- 
paragement. Holland,  though  it  grew  no  timber,  was  the  principal 
mart  for  this  produce,  and  like  genuine  traders,  the  most  patriotic 
Hollander  thought  no  scorn  of  selling  materials  of  war  to  Philip  of 
Spain  and  Louis  of  France.  They  believed,  and  quite  correctly, 
that  they  could  sell  them  the  goods,  and  maintain  war  on  a  portion 
of  the  profits.  We  did  the  same  by  the  first  Napoleon  during  the 
great  Continental  war,  and  with  the  same  results.  Napoleon  put 
impediments  in  the  way  of  procuring  stores  for  his  own  troops,  and 
thereupon  secured  a  higher  rate  of  profit  for  the  English  manu- 
facturer and  merchant.  There  are  several  other  names,  manifestly 
of  French  or  Flemish  origin,  in  the  first  list  of  directors.  Now, 
though  the  days  of  active  persecution  were  past,  disabilities  were 
put  on  Nonconformists,  and  humiliations  were  inflicted.  Inconse- 
quence, the  London  Dissenters  became  a  virtual  corporation,  which 
acted  with  a  common  purpose,  had  reciprocal  sympathies,  and  gave 
mutual  aid.  Macaulay,  you  may  remember,  has  shown  how  much 
better  were  the  prospects  in  the  professions  and  in  trade  of  those 
who  stood  in  with  Nonconformity.  The  Nonconformist  minister 
exercised  far  more  influence  than  the  Anglican  divine  did,  the 
Nonconformist  trader  was  more  sure  of  help  and  consideration  from 
his  wealthier  co-religionists  than  the  shopkeeper  did  who  affected 
Episcopal  ministrations.  This  is  always  the  result  of  persecution, 
when  it  does  not  go  to  extremes.  It  unites  its  objects  into  an 
organization. 

The  directors,  too,  were  Whigs,  not  of  the  school  which  made 
alliances  with  their  opponents  in  order  to  keep  office,  as  the  Whigs 
of  1710  did,  or  maintained  a  sulky  opposition  to  their  old  leaders 
as  the  Whigs  of  1730  did,  but  downright  faithful  adherents  to  the 
principles  of  1G88.    The  critics  of  the  Act  of  1694,  under  which  the 


216  PAFEB  CVBBENCIES, 

Bank  of  England  was  first  constituted,  provided,  fortunately  for  the 
institution,  that  the  advances  that  might  he  made  to  Government, 
beyond,  as  it  appears,  such  ordinary  banking  facilities  as  were 
accorded  to  all  customers,  should  have  the  sanction  of  Parliament, 
the  violation  of  such  a  regulation  being  visited  with  a  heavy  fine. 
Hence  the  Bank  could  always  plead  inability  to  make  large 
advances  by  the  terms  of  the  Act  under  which  the  Bank  existed. 
When,  in  1797,  Pitt  nearly  ruined  the  Bank  and  its  credit  by  exces- 
eive  demands  on  its  specie,  under  the  form  of  advances  on  public 
securities  already  created  by  parHamentary  grants,  he  strained  the 
principle  of  the  Bank  Acts,  if  he  did  not  violate  the  letter. 

The  political  relations  of  the  Bank  of  England  to  the  Government, 
as  soon  as  ever,  under  its  second  charter,  it  had  conferred  on  it  a 
virtual  monopoly  of  joint- stock  banking,  were  of  singular  impor- 
tance in  the  development  of  the  parliamentary  system  which  was 
formulated  in  1688.  There  was  only  the  form  of  a  representative 
assembly ;  the  duly  elected  members  were  outnumbered  by  those 
returned  from  the  close  boroughs.  But  the  Bank  of  England  be- 
came the  financial  agent  of  the  Government,  and  in  no  slight  degree 
its  financial  master.  It  was,  indeed,  from  time  to  time,  compelled 
to  accept  disadvantageous  terms,  on  the  renewal  of  its  charter  at 
successive  periods,  for  it  overvalued  its  power  of  issue,  and  the 
advantage  which  its  apparent  monopoly  gave ;  but  the  Bank  directors 
knew  that  the  Government  of  the  day  could  not  break  with  it,  or 
dispense  with  its  services.  The  fortunes  of  the  Bank  were  bound 
up  with  he  fortunes  of  the  Act  of  Settlement,  and  there  was  no 
fear  that  a  correspondent  of  the  Stuarts  would  be  found  in  the 
Bank  ].arlour.  It  thus  wielded  a  silent,  secret,  but  most  effective 
authority.  Addison  illustrated,  in  one  of  his  cleverest  "  visions," 
how  the  Bank  of  England  was  identified  with  English  credit.  The 
Bank  negotiated  all  the  loans  of  the  eighteenth  century,  and  was 
the  agency  by  which  the  good  faith  of  Government  was  assured. 

From  the  very  first,  the  Bank  possessed  and  exercised  the  power 
of  discretionary  issue.  Its  note  was  not,  and  never  purported  to 
be,  a  warrant  entitling  the  holder  to  recover  the  exact  and  literal 
value  received,  the  very  same  coins  which  had  been  deposited,  and 
were  originally  made  the  security  for  the  note.  It  always  professed 
to  trade  with  the  customers'  money,  only  engaging  to  refund  to 


THE  BEL  AT  IONS  OF  THE  BANK  TO  GOVEBNMENT.    217 

tliese  customers  at  their  discretion,  the  cash  which  had  been 
entrusted  to  it.  It  had,  of  course,  to  learn  within  what  limits  it 
could  use  its  customers'  balances,  and  more  difficult  still,  to  deter- 
mine the  extent  to  which  it  could,  when  required,  make  advances 
from  these  balances  on  public  securities,  actual  or  prospective. 
Its  notes,  too,  were  of  large  denominations,  and  were  therefore 
generally  employed,  if  not  almost  entirely,  in  mercantile  transac- 
tions, especially  in  the  transmission  of  credits,  operating  as  short 
dated  bills  of  exchange. 

Now  I  have  told  you  that  no  country  ever  retains  a  larger  amount 
of  metallic  currency  than  it  finds  necessary  for  the  transaction  of 
its  proper  business.  The  private  individual  takes  money  to  spend 
or  to  hoard  or  to  invest,  in  some  interest  or  profit-bearing  security. 
If  it  is  spent  or  invested,  it  passes  away  from  the  individual  to  those 
whose  interests,  say,  as  traders,  is  to  make  money  yield  as  rapid  a 
profit  as  possible.  If  it  is  hoarded,  it  is  withdrawn  altogether  from 
circulation,  and  as  long  as  it  remains  in  this  form,  it  is  virtually 
extinguished  as  an  economical  agent.  Now  what  is  true  of  a 
metallic  currency,  is  true  of  a  substitutive  or  subsidiary  currency. 
No  man  keeps  more  of  it  than  he  wants,  and  society  collectively 
circulates  no  more  than  it  wants.  To  keep  it  needlessly  is  to  incur 
a  superfluous  risk  to  the  ordinary  holder,  to  dechne  the  chance  of 
profit  to  the  manufacturer  or  trader.  The  ingenuity  of  modern 
society  is  turned  in  all  directions  toWards  making  its  metallic  cur- 
rency as  efficient  as  possible,  and  it  strives  with  equal  assiduity  to 
make  its  paper  currency  as  efficient  as  possible.  It  foUows,  there- 
fore, that  bankers  cannot  put  more  paper  money  into  circulation  than 
the  public  need.  If  they  make  an  excess  of  issue,  the  excess  comes 
back  instantly  to  themselves,  as  the  parties  responsible  for  the 
engagement  which  the  note  implies.  Again,  if  the  community 
requires  more  paper  currency  than  the  banks  are  able  or  willing  to 
give,  either  by  legal  restraint  or  by  caution,  the  community  will 
discover  some  paper  substitute,  which  it  will  employ  in  lieu  of  notes. 
Thus,  fifty  years  ago,  bills  drawn  by  the  Manchester  house  of  Jones 
Loyd  and  Co.,  on  the  London  house  of  Jones  Loyd  and  Co.,  per- 
formed all  the  functions  of  a  note  currency  in  Lancashire,  and 
brought  no  small  profit  to  the  ingenious  firm,  of  which  the  head 
was  the  late  Lord  Over  stone. 


218  PAPEB  CURRENCIES. 

It  is  sometimes  alleged  that  paper  currency  has  as  effective  an 
influence  over  prices  as  a  metallic  currency  is  admitted  to  have. 
But  this  is  an  error.  Gold  and  silver  influence  prices  when  they 
are  adopted  as  co-ordinate  currencies  in  proportion  to  the  cost  at 
which  they  are  acquired,  the  cost  of  acquisition  being  also  affected 
by  the  cost  of  their  production,  when  that  cost  conforms  to  the 
ordinary  conditions  under  which  industry  is  carried  on.  But  neither 
cost  of  acquisition  nor  cost  of  production  affect,  to  any  sensible 
degree,  the  value  of  a  note.  Notes  are  the  representatives,  the 
reputed  equivalents  of  metalKc  money,  and  their  acceptance  and 
circulation  at  the  full  value  of  what  they  represent,  depends  on 
the  conviction  that  they  can  be  changed  into  money  at  the  pleasure 
or  convenience  of  the  holder.  If  they  cannot  be  so  converted, 
and  still  keep  up  their  full  credit,  as  happened  during  the  first 
eight  or  ten  years  of  the  Bank  restriction  of  1797,  it  is  due  to 
the  fact  that  the  public  knows  them  to  be  amply  covered,  and 
therefore  agrees  to  use  them  as  currency  at  their  full  nominal 
value.  If  such  an  issue  is  in  excess,  or  is  not  sufficiently 
covered,  the  note  is  sure  to  be  discounted,  as  happened  during 
part  of  the  last  ten  years  in  which  the  restriction  endured. 

But  it  is  said,  by  virtue  of  discretionary  power  of  issuing  notes, 
a  bank  can  practically  coin  money,  and  so  by  supplying  an  excess 
of  money  give  occasion  to  wild  speculation.  This  is  a  confusion 
between  money,  paper  and  metallic,  and  credit.  If  a  bank  could 
coin  metallic  money,  it  could  as  soon  create  an  excess  as  it  could 
by  issuing  notes.  It  would  do  nothing  by  such  an  act.  If  the 
money  were  in  excess  it  could  go  out  of  the  country,  if  the  notes 
were,  they  would  come  back  to  the  bank  which  issued  them.  No 
power  can  make  any  people  take  and  circulate  more  money  than 
they  want.  Of  course  I  do  not  mean  that  bankers  should  be 
allowed  to  circulate  what  paper  they  please.  Every  bank  which 
circulates  paper,  nay,  every  bank  which  takes  deposits  and  trades, 
should  be  constrained  to  prove,  by  an  independent  audit,  that  their 
assets  entirely  cover  their  liabilities,  and  the  surplus  of  assets  over 
liabilities,  on  the  faith  of  which  their  customers  deal  with  them, 
and  other  than  their  customers  take  their  notes,  should  be  as 
accurately  expressed  and  published.  The  failure  of  the  Greenways' 
Bank  exhibits  the  difference  between  a  real  and  sham  audit.     I 


THE  P0WEB8  OF  A  BANK  OVEB  NOTE  ISSUES.     219 

will  tell  you  before  I  conclude  this  lecture  ^hy  a  sham  audit  was 
permitted  under  the  Act  of  1844. 

Banks  can  assist  a  rash  speculation  by  granting  indiscreet  credit, 
though  there  is  less  Hkelihood  that  they  will  do  so  than  other 
traders  will,  for  it  is  a  fundamental  rule  in  banking  to  deal  with 
easily  convertible  securities  only.  Thus  a  bank  will  discount  a 
three  months  bill  having  known  names  on  it,  because  the  security 
is  short;  it  will  not  advance  money,  if  it  be  wise,  on  the  mortgage  of 
real  estate,  however  ample  the  security  is,  because  the  term  is 
indefinite,  or  in  banker's  language,  a  mortgage  is  a  dead  security. 
But  banks  may  be  deceived  by  fraudulent  bills,  or  may  be  under 
the  impression  that  the  return  will  be  quick,  when  it  turns  out  to 
be  delayed,  or  they  may  give  credit  to  those  whom  they  believe  to 
be  solvent,  when  they  are  not  so.  Credit  may  then  raise  prices, 
but  it  does  so  only  because  it  is  believed  to  be  money,  or  to  have 
money  behind  it.  Generally,  however,  if  not  universally,  the 
rising  market  precedes  the  indiscreet  grant  of  credit,  for  the 
prospect  of  exceptional  profit  must  needs  go  before  the  attempt  to 
gain  it.  I  do  not  deal  with  the  cases  in  which  credit  is  continued, 
after  it  is  shown  to  be  undeserved  or  incautious,  where  I  mean  the 
banker  thinks  that  he  can  by  timely  help  recover  what  is  in  danger. 
The  effort  is  seldom  successful,  and  is  technically  called  throwing 
good  money  after  bad.  Nor  do  I  deal  with  fraudulent  banking  on 
the  part  of  the  banker.  This  is  a  crime,  though  it  is  not  punished 
always  as  it  deserves  to  be.  I  am  speaking  of  business  carried  on 
by  honourable  and  prudent  men. 

Neither  note  issues  nor  credits  can  be  based  on  anything  but 
money,  or  upon  securities  convertible  into  money  with  the  least 
conceivable  delay.  Suppose,  for  example,  that  a  bank  has  liabilities 
in  the  shape  of  customers'  balances,  and  notes  to  the  extent  of  a 
million.  It  should  have  one-third  of  its  habilities  ready  at  hand, 
in  the  shape  of  money,  of  Bank  of  England  notes,  or  of  deposits 
similar  to  those  of  its  customers  in  the  Bank  of  England  or  at 
call.  It  may  have  another  third  in  Government  stocks,  on  which 
it  can  borrow  if  it  needs,  or  sell.  It  may  have  advanced  the 
residue  on  commercial  bills,  which  in  a  strait,  are  also  negotiable 
though  not  as  speedily  or  as  safely  as  the  securities  which  I  have 
referred  to.     It  ought,  besides,  to  have  its  own  property  and  its 


220  PAPEE  CUBBENCIES. 

own  reserves.  I  have  given  you  only  a  sketch  of  what  a  bank 
might  do  with  wisdom.  But  there  are  occasions  on  which  it 
might  as  wisely  vary  the  distribution  of  its  assets,  and  in  the 
interpretation  of  these  occasions,  but  always  with  the  knowledge 
that  it  must  secure  itself,  the  practical  judgment  of  the  banker 
resides.  At  this  stage,  I  must  leave  the  economical  view  of  the 
subject,  in  connection  with  which  are  many  problems,  and  return 
to  the  historical  particulars  before  me. 

The  Charter  of  the  Bank  of  England  was  issued  on  July  24, 1694. 
It  began  its  business  about  the  middle  of  the  August  following. 
During  the  first  two  years  of  its  existence,  when  its  charter  was 
incomplete,  it  was  subjected  to  three  very  serious  strains.  These 
were  the  state  of  the  currency,  the  project  of  the  land  bank,  and 
the  straits  to  which  it  was  put  by  unwisely  advancing  too  much  of 
its  cash  on  Government  securities.  The  first  of  these  difficulties 
was  met  slowly,  and,  as  far  as  the  Bank  was  concerned,  grudgingly, 
by  the  recoinage ;  the  third  by  an  exposure  of  the  Bank's  affairs  in 
Parliament,  by  the  evidence  afforded  by  its  solvency,  and  by  the 
wisdom  which  for  a  hundred  years  guarded  against  the  recurrence 
of  the  risk.  On  December  4,  1696,  the  issues  of  the  Bank  were 
del, 657,996  10s.  6d.,  and  its  cash  in  hand  was  only  £35,664  Is.  lOd. 
It  had  practically  lent  this  disproportionate  sum  to  Government  by 
anticipating  the  payment  of  taxes,  an  act  of  incaution  which, 
unless  its  banking  business  were  to  be  given  up  altogether,  nothing 
but  prudence  could  save  it  from.  The  second  of  these  causes,  the 
temporary  rivalry  of  the  land  bank,  requires  a  somewhat  longer 
comment.  The  land  bank  is  an  illustration  of  the  error  into  which 
human  societies  are  apt  k)  fall. 

If  I  have  made  myself  at  all  clear,  you  will  have  seen  that  a 
paper  currency  will  be  accepted  and  used  as  money  only  on  the 
understanding  that  it  may  be  chs^iged  into  money  at  the  pleasure 
of  the  person  who  holds  it.  It  may  be  the  case,  and  it  constantly 
is  the  case,  that  the  actual  amount  of  paper  money  in  circulation 
is  greatly  in  excess  of  the  known  gold  which  is  held  to  meet  it, 
though  it  never  in  a  well-ordered  community  with  a  convertible 
paper  currency  nearly  equals  the  amount  of  gold  which  is  actually 
circulating  in  the  country.  If,  however,  one  includes  in  the  paper 
currency,  the  cheques  and  bills  and  otlier  instruments  of  credit, 


THE  LAND  BANK  OF  1696.  221 

mature  and  immature,  the  paper  put  into  circulation  in  a  com- 
mercial country  is  greatly  in  excess  of  the  gold  which  is  reputed 
to  cover  it.  But  this  makes  no  one  uneasy.  The  extent  to  which 
metallic  money  is  made  to  support  other  instruments  of  credit 
indicates  the  efficiency  of  the  currency,  and  the  extent  to  which 
gold  is  demanded  for  notes  is  a  calculable  average,  more  interesting 
to  the  bullion  dealer  and  the  bill  discounter  than  to  the  ordinary 
Englishman,  who  is  satisfied  that  he  can  get  what  he  wants  in  the 
way  of  money  as  he  wishes.  In  short,  additions  to  the  stock  of 
gold  in  domestic  circulation  are  temporary,  dependent  on  easily 
ascertained  causes,  and  therefore  anticipated.  But  though  the 
power  to  get  gold  may  not  be  exercised,  the  power  must  be  recog- 
nized and  must  be  respected. 

Now  from  seeing  how  great  a  mass  of  business  may  be  done  with 
but  little  metallic  money,  people  begin  to  conclude  that  one  can  do 
without  it  at  all,  and  can  substitute  in  the  place  of  it'^Slnterest- 
bearing  security,  such  as  a  public  fund,  or  a  highly  desirable  kind 
of  property,  such  as  recently  was  land,  for  the  rent  of  land  from 
the  begimiing  of  the  seventeenth  to  the  last  quarter  of  the  nine- 
teenth had  been  regularly  rising  in  amount.  *'  Why  not,  then," 
persons  argue,  issue  notes  on  the  security  of  Consols,  or  on  the 
land  of  the  country  ?  The  security  is  indisputable,  the  pledge 
stable,  the  basis  of  the  security  bears  a  revenue,  while  gold,  do 
what  we  will,  yields  in  itself  no  revenue,  and,  as  you  economists 
say,  eludes  all  efforts  to  forcibly  detain  it.  Surely  stocks  or  land 
are  a  better  security.  Do  not  your  own  bankers  invest  their 
balances  in  stocks,  rather  than  accumulate  barren  money  ?  " 

To  this  the  answer,  and  the  sufficient  answer,  is,  that  people  will 
take  and  circulate  notes  because  they  know  that  they  can  get  gold 
for  them.  For  a  £5  Bank  of  England  note  I  can  get  five 
sovereigns,  when  I  want  to  get  them.  If  instead  of  five  sovereigns, 
I  am  offered  by  the  bank  which  issues  the  note  £5  worth  of  stock, 
or  land,  what  I  receive  in  exchange  is  of  no  use  to  me  unless  I 
sell  it,  and  so  take  upon  my  shoulders  a  second  transaction, 
certainly  of  a  troublesome,  possibly  of  a  risky,  character.  After 
the  example  of  Master  Dumbleton,  I  like  not  the  security,  and  no 
one — unless  he  were  a  conscious  or  unconscious  swindler,  and  Sir 
John  Falstaff,  I  fear,  was  intended  to  represent  the  former  class  of 


222  PAPEB  CUBBENCIES. 

adventurers — would  press  it  on  me.  As  to  the  land  bank  of  1696, 
the  scheme  possessed  every  blunder  which  crazy  heads  could 
have  invented,  and  it  would  not  have  had  currency  for  a 
day,  bad  not  the  country  gentlemen  and  Tories,  who  hated  the 
Whigs  and  the  Dissenters,  imagined  that  they  could  get  money 
easily,  and  ruin  the  psalm-singing,  snivelling,  Puritan  usurers 
of  Grocer's  Hall,  which  was  then  the  habitation  of  the  Bank  of 
England. 

In  the  darkest  hour  of  the  Bank  of  England,  in  the  spring  of 
1696,  when  the  Tories  were  pressing  forward  the  land  bank,  and 
were  prematurely  glorying  in  the  certain  success  of  a  swindle, 
Montague  contrived  to  procure  a  power  to  issue  on  behalf  of  the 
Government  what  were  virtually  bills  of  exchange,  bearing  a  fixed 
rate  of  interest,  and  secured  upon  anticipated  revenue,  and 
redeemable  at  a  given  date.  These  are  called  Exchequer  bills,  and 
they  remain  to  this  day  as  a  Treasury  expedient  with  which  to 
keep  a  balance  in  the  Treasury  by  their  circulation.  It  was,  and 
is,  in  their  capacity  of  bills  of  exchange,  that  they  are  first-class 
banking  securities.  In  this  manner  they  perform  the  functions  of 
currency,  render  that  whose  functions  they  perform  more  efficient, 
but  do  not  afi"ect  prices. 

For  a  hundred  years  the  Bank  of  England  performed  notable 
functions.  I  cannot  follow  them  in  this  lecture,  which  is  only 
intended  to  give  an  outline  of  the  principles  on  which  banking  is 
carried  on,  and,  according  to  my  custom,  to  illustrate  what  I  have 
to  say  by  historical  parallels.  During  this  century,  it  became  the 
centre  of  trade  and  credit,  was  to  successive  Governments  a 
permanent  ministry  of  finance  of  an  invaluable  kind,  and  was  an 
adviser;  sometimes  an  ineffectual  adviser  of  prudent  counsels. 
Of  course  it  made  mistakes,  but  it  gained  wisdom  for  the  future, 
and  accumulated  that  prudence,  invaluable  in  public  business, 
which  comes  from  practical  experience.  As  long  as  the  Bank 
adheres  to  its  traditions,  it  is  of  no  consequence  to  know  what  are 
the  present  politics  of  its  directors.  It  holds  a  place  which  is  not 
above  party,  for  party  is  the  eternal  struggle  between  good  and  evil, 
but  apart  from  party,  because  there  is  no  doubt,  to  use  a  logical 
expression,  about  either  its  major  or  minor  premises.  But  the 
Bank  of  England  is  the  glory  of  the  Eevolution  Whigs  of  the  better 


THE  CBISIS  OF  1797.  223 

school,  and  not  of  them  only,  but  of  their  best  type,  the  London 
Dissenters  of  that  period. 

Close  upon  a  hundred  years  after  its  first  great  crisis  came  the 
second.  I  am  referring  to  the  events  of  February  10, 1797.  The 
Bank  had  made  prodigious  loans  to  Government,  for  the  younger 
Pitt  was  straining  every  nerve  to  keep  up,  at  the  expense  of 
England,  the  policy  which  he  thought  proper  to  adopt  in  1793, 
I  have,  to  be  sure,  very  strong  opinions  about  that  policy.  His  con- 
temporaries, especially  those  whom  he  favoured,  called  him  a 
heaven-born  minister.  I  am  afraid  that  I  must  assign  his  place  of 
origin  to  a  lower  region,  for  it  would  be  a  strange  heaven  in  which 
his  policy  would  be  acceptable.  Again,  Pitt  anticipated  taxes, 
which,  in  that  epoch  of  most  atrocious  finance,  he  was  imposing, 
and  on  the  date  given,  or  rather  on  February  26th,  the  floating  loan 
to  Government  was  £7,586,445,  and  the  cash  in  the  Bank's  hands 
£1,272,000.  We  were  engaged  in  subsidising  the  German  prince- 
lets.  I  will  not  touch  here  on  the  poUcy  which  was  deemed 
necessary,  the  suspension  of  cash  payments,  the  order  in  Council 
that  the  Bank  of  England  be  ordered  to  forbear  any  cash  in 
payment  of  its  notes.  This  needs  a  lecture  of  its  own,  to  be 
postponed.  At  present  it  is  more  important  that  you  should  learn 
the  principles.  We  shall  have  hereafter  to  criticise  the  par- 
ticulars. As  the  old  logicians  used  to  say,  we  are  dealing  with  the 
analytics  now,  we  shall  have  to  handle  the  topics  hereafter. 

No  subject  was  more  hotly  debated  during  the  suspension  of  cash 
payments,  in  effect  enduring  for  twenty-two  years,  than  the  policy 
of  the  Government  and  the  Bank.  The  latter  would  and  could  have 
resumed  cash  payments  easily  during  the  epoch  of  suspension, 
but  the  Government  believed  that  they  had  an  important  engine  in 
the  paper  currency,  which  they  must  keep  in  their  hands.  Mean- 
while, gold  disappeared,  was  hoarded,  held  by  the  Bank  and 
exported.  The  only  circulation  was  one-pound  notes,  worn  silver 
and  copper.  The  advocates  of  an  honest  currency  were  thought 
to  be  disaffected,  as  the  Wall  Street  gamblers  in  American  soft 
money  tried  to  urge  that  the  advocates  of  good  money  were. 
Foiled  in  this  calumny,  they  got  a  well-known  Oxford  professor 
to  lecture  in  New  York  on  the  lofty  patriotism  which  swindled 
manufacturers  and  workmen.     America  is  a  very  free  country. 


224  FAPEB  CUEEENCIE8. 

Some  of  its  public  men,  and  with  impunity,  make  free  with  the  ten 
commandments,  and  seek  for  the  approval  of  poHtical  economy. 
"When  they  did  me  the  honour  of  approaching  me,  I  gave  them  no 
compHments.  The  advocates  of  an  honest  currency  got  the 
Bullion  Committee  appointed  in  1810.  The  Committee  reported, 
what  Mr.  Vansittart — perhaps,  after  Dashwood,  the  most  absurd 
Chancellor  of  the  Exchequer  who  ever  filled  the  office,  I  do  not 
touch  more  recent  examples — neglected.  Lord  King  insisted  on 
liis  tenants  paying  in  gold.  His  son,  my  late  friend  Mr.  Locke 
King,  told  me  that  he  did  this  because  one  of  his  tenants  was  a 
Bank  director.  Then  came  Vansittart's  motion  that  the  bank-note 
liad  not  fallen  in  value,  but  gold  had  risen,  the  climax  of  financial 
folly;  and  Lord  Stanhope's  motion  of  July,  1811,  making  it  illegal 
to  pay  or  receive  gold  at  less  than  its  nominal  value,  the  climax 
of  financial  injustice.  I  only  touch  briefly  on  that  which  I  hope 
to  treat  in  detail  hereafter. 

I  must  in  the  same  manner,  and  on  this  occasion,  only  deal 
superficially  with  the  famous  Act  of  1844.  Sir  Robert  Peel  was 
under  the  impression,  gathered,  not  unnaturally,  from  the  action 
of  the  Bank  during  the  suspension,  that  bankers  could  issue 
excessive  numbers  of  their  notes,  and  thereby  stimulate  rash 
speculation.  Perhaps  they  can,  under  an  inconvertible  currency ; 
but  even  here  the  infallible  barometer  of  the  discount  to  which 
the  note  is  subjected,  leaves  even  this  an  arguable  question.  Now 
he  could  deal  with  the  issues  of  the  Bank  of  England.  The 
London  bankers  had  long  since  abandoned  the  issue  of  notes,  and 
had  invented,  to  the  great  advantages  of  commerce,  and  monetary 
transactions,  the  system  of  cheques.  Peel  therefore  resolved, 
acting  mainly  on  the  advice  of  Mr.  Jones  Loyd,  afterwards  Lord 
Overstone,  Colonel  Torrens,  and  Mr.  Norman,  to  alter  the  constitu- 
tion of  the  Bank  of  England — Lord  Overstone  having  made  the 
main  of  his  fortune  by  a  process  which  he  now  urged  should  be 
illegal.  He  divided  the  Bank  of  England.  The  issue  department 
he  refounded  on  the  principle  of  a  bank  of  deposit,  taking  away 
from  the  directors  the  power  of  discretionary  issues,  and  making 
the  number  or  value  of  existing  bank  notes  an  automatic  quantity, 
partly  based  on  public  securities,  partly  on  bullion  in  the  Bank 
cellars.     He  left  the  Bank  to  carry  on  its  banking  business  at  its 


FEEUS  ACT  OF  1844.     THE  COUNTBT  BANKS.        225 

own  discretion.  He  ordered  that  a  weekly  balance  sheet  of  the 
Bank's  financial  position  should  be  published,  and  in  this,  I  think, 
he  acted  wisely;  for  all  financial  knowledge,  if  the  account  be  not 
cooked,  is  of  high  practical  value.  He  permitted,  in  case  country 
banks  abandoned  their  business  or  failed,  that  the  Bank  of 
England  should  be  entitled  to  add  their  issues  to  its  own. 

The  expedient,  as  a  means  for  checking  what  Peel  deprecated, 
failed.  Within  a  year  or  two  after  his  Act,  he  had  to  authorise  an 
excess  of  issue  on  the  authority  of  the  Administration,  and  get  a 
bill  of  indemnity  for  his  action.  This  has  happened  since,  time 
and  again,  and  the  periodical  suspension  of  a  law  seems  to  me  to 
be  the  most  serious  criticism  which  can  be  brought  against  its 
efficacy.  Of  course  the  ingenuity  of  finance  can  always  baffle  the 
most  peremptory  enactments,  and  in  spite  of  Peel's  Act,  perhaps 
in  consequence  of  it,  the  development  of  the  system  of  paper 
substitutes  has  been  rapid  and  remarkable.  But  I  have  not  space 
or  time  on  this  occasion  to  prosecute  an  inquiry,  either  into  the 
Act  itself  or  into  the  remedies  which  have  been  suggested  for  its 
amendment  I  ought,  however,  here  to  say,  that  though  I  think 
meanly  of  Kicardo's  theory  of  rent,  conclude  that  his  speculations 
on  value  are  metaphysical  rather  than  practical,  and  see  great 
difficulties  in  accepting  his  canons  on  over-production  or  what  were 
called  general  gluts,  his  authority  on  all  matters  of  monetary 
science  is  of  the  highest.  Here,  like  the  Juno  of  Virgil,  he  was  at 
home  and  master. 

A  few  words  on  the  country  banks.  Peel  limited  their  issues  to 
their  average  amounts  at  the  date  of  his  Acts,  and  prohibited  new 
country  banks  from  issuing  at  all.  But  he  took  no  steps  to  secure 
evidence  of  their  solvency,  insisted  on  no  independent  audit  of 
their  assets  and  liabilities.  The  fact  is,  the  country  bankers  were 
the  social  and  political  despots  of  the  small  boroughs,  and  in  Peel's 
day  these  small  boroughs  were  the  supports  of  his  party.  To 
have  affronted  the  country  bankers,  to  have  exacted  pledges  of 
integrity  from  them,  would  have  been  to  imperil  the  maintenance 
of  Conservative  principles  among  those  who  aided  the  party  at 
Westminster.  Whether  after  its  disruption  by  the  adoption  of 
free  trade  principles  in  1846,  Peel,  had  he  returned  to  office,  would 
have  amended  the  Act  of   1844,  in  the  direction  which  I  have 

16 


226  PAPER  CUBBENCIES. 

indicated,  is  a  problem  which  his  premature  death  in  1850  hag 
made  insoluble.  In  this  direction  of  monetary  reform  no  successor 
of  Peel  has  gone,  though  I  have  reason  to  know  that  changes  have 
been  contemplated,  and  perhaps,  too,  not  in  the  remote  future. 
Perhaps,  also,  a  recent  and  flagrant  failure  will  stimulate  the  reform. 
It  cannot  come  too  soon. 


XL 

THE  OKIGIN  AND  PKOGRESS  OF  ENGLISH  PAUPERISM. 

All  economic  utility  a  resultant  of  cost — The  power  of  human  energy 
over  nature  indefinite — Present  and  manifest  impossibilities  illus- 
trated— The  coal  famine  of  1873 — Possibilities  of  production  to  the 
acre — The  saving  of  labour  and  cost — The  recipients  of  profits — 
The  position  of  rent — The  wisdom  of  the  rent-receiver — The  causes 
why  wages  were  depressed — The  magistrates  in  Quarter  Sessions — 
The  Acts  for  the  relief  of  the  poor — The  defence  of  such  Acts- 
Parochial  settlement — The  close  and  open  parish — The  eighteenth 
century — Arthur  Young's  comments — The  Speenhamland  Act — 
The  origin  of  the  New  Poor  La/Wf  and  its  effects, 

1  MAY  I  trust  assume  that  you  know  and  realize  that  the  produc- 
tion of  wealth,  i.e.,  the  bestowal  of  utility  on  matter,  by 
intelligent  labour,  is  limited  only  by  the  laws  of  nature,  by  which 
I  mean  hindrances  of  a  physical  character  put  upon  the  process  by 
which  those  utilities  are  induced.  Some  of  these  hindrances  are 
obvious.  To  give  motion  we  must  incur  cost.  You  cannot  put  the 
human  machine  in  motion,  or  any  of  those  substitutes  for  human 
labour  which  ingenuity  has  developed,  without  expenditure,  the 
expenditure  of  that  which  has  been  acquired  by  previous  labour. 
Even  those  natural  forces  which  man  has  pressed  into  his  service, 
the  force  of  running  or  falling  water,  of  the  winds  and  the  tides, 
are  of  no  avail,  unless  man  appropriates  them  by  mechanism, 
which  represents  the  expenditure  of  previous  labour.  So  again, 
however  much  you  may  diminish  its  effects,  you  cannot  overcome 
friction  entirely,  especially  in  its  most  obvious  form,  the  resistance 
of  air  to  artificial  motion.    But,  on  the  other  hand,  though  we 


228  OBIGIN  AND  PBOGBESS  OF  ENGLISH  PAVPEBISM, 

know  that  there  are  limits  to  the  power  of  man  in  the  appHcation 
or  adaptation  of  natural  forces,  we  do  not  know  and  cannot  tell 
what  those  limits  are.  Every  year  discoveries  are  made  which  set 
those  limits  further  back,  inventions  which  make  that  easy  and 
familiar  which  at  an  earlier  time  seemed  impracticable  and 
impossible. 

Now  before  I  go  further  with  the  subject  which  I  am  treating 
to-day,  I  may  say  that  nothing  is  more  barren,  arid,  and  meta- 
physical, than  the  discussion  as  to  which  is  prior  in  existence, 
capital  or  labour,  and  the  collection  of  inferences  to  which  you 
must  expect  a  very  easy  reply.  All  capital,  like  all  wealth,  is  the 
product  of  previous  labour,  and  it  may  be  readily  conceded  that  all 
capital,  however  rude  its  form,  or  simple  its  kind,  must  have  been 
a  resultant  from  a  previous  satisfaction  of  natural  necessities,  and 
from  an  intelligent  consciousness  that  the  labour  of  creating  it 
would  shorten  or  expedite  future  labours.  But  though  this  is  the 
obvious  and  logical  account  of  the  origin  of  capital,  and  may  be, 
to  some  extent,  illustrated  from  the  practice  of  savage  races,  to 
draw  a  conclusion  from  it,  that  economical  labour  can  be  considered 
independently  of  economical  capital,  is  to  confound  a  primitive 
cause  with  a  modern  effect.  If  I  have  made  myself  at  all  plain, 
I  have  already  shown  how  capital  and  labour  in  what  we  have  to 
consider  an  organized  and  progressive  society  are  interlaced,  how 
they  are  remunerated,  and  to  some  extent  how  far  the  more 
influential,  and  politically  more  powerful,  of  the  two  factors 
has  been  able  to  oppress  the  other.  But  to  discuss  the  origin  of 
primeval  capital  is  a  logomachy ;  and  to  infer,  as  some  have  done, 
that  the  analysis  of  its  origin  is  to  give  a  commanding  position  to 
the  claims  of  labour,  is  a  sophism,  which  will  hinder  instead 
of  helping  the  true  interests  and  the  ultimate  improvement  of 
those  who  are  popularly  said  to  work  for  wages.  And  similarly, 
it  is  easy  to  exaggerate  the  functions  of  capital,  and  as  it  is  easy  so 
it  is  a  common  practice. 

I  have  said  that  the  limit  of  restraint  imposed  on  human 
energies  by  what  are  known  as  the  laws  of  nature  is  constantly 
being  pushed  back.  But  political  economists  have  frequently 
assumed  that  the  limit  has  been  reached,  and  that  it  will  be  driven 
back  by  no  new  discovery  or  utilization  of  force.     This  disposition 


PBESENT  AND  MANIFEST  IMPOSSIBILITIES.        229 

to  look  on  human  skill  as  having  exhausted  its  powers,  and  there- 
fore to  indulge  in  economical  pessimism  is  frequently  found  in  the 
works  of  the  most  approved  writers.  Let  me  take  some  utterances 
of  Mr.  Mill,  and  in  taking  these  I  do  not  by  any  means  exhaust 
his  sinister  predictions.  Mr.  Mill  has  accepted,  with  all  its  gloomy 
riders,  the  doctrine  which  has  been  called  the  law  of  diminishing 
returns ;  he  distressed  himself  with  Mr.  Jevons'  inquiry  into  the 
probable  exhaustion  of  the  English  coal-beds,  and  the  con- 
sequences to  English  industry  and  English  life,  when  we  were  at 
once  deprived  of  motive  power  and  warmth,  inferring  from  it 
especially,  that  it  was  necessary  at  once  to  set  about  clearing 
away  the  public  debt,  since  hereafter  we  should  be  certainly  unable 
to  do  so ;  and  in  his  investigations  into  population,  and  the  reputed 
causes  of  its  redundancy,  he  concluded  that  the  field  of  foreign 
supply  was  very  narrow,  and  would  soon  be  exhausted.  Now  in 
these  three  alarms  he  confounded  a  present  impossibility,  the 
interpretation  of  which  is  subjective,  and  should  be  founded 
on  facts,  with  a  manifest  impossibility,  afforded  by  the  inex- 
pugnable resistance  of  natural  law,  which  is  objective. 

Now  I  will  grant  that  it  is  a  manifest  impossibility  to  grow  800 
bushels  of  corn  to  an  acre  of  land,  or  7^  tons  of  grain  food 
for  man  and  animals,  or,  at  any  rate  such  a  rate  of  production 
is  inconceivable,  the  best  present  average  being,  say,  1^  tons 
or  48  bushels.  I  can  more  readily  admit  that  we  shall  not  be 
able  to  convey  goods  and  passengers  over  a  railroad  at  the  velocity 
of  a  cannon-ball,  during  the  first  few  seconds  of  its  progress, 
or  that,  granted  that  Mr.  Jevons  was  accurate  in  his  estimate  of 
the  coal-fields,  of  the  rate  of  production,  of  the  rate  of  consump- 
tion, and  that  he  was  also  right  in  postulating  that  no  economy  in 
consumption,  and  no  substitution  of  any  other  force,  was  possible, 
the  future  exhaustion  of  coai  supply  in  Great  Britain  was  a 
calculable  problem.  I  will  admit  that,  when  Mr.  Mill  wrote,  the 
cost  of  freight  by  rail  and  steam  vessel  was  so  high  per  ton  mile, 
that  it  must  have  materially  curtailed  the  possibility  of  supply  from 
distant  regions.  But  in  all  these  cases  a  present  impossibility,  as 
it  seemed,  was  found  out  to  be  no  manifest  impossibility,  that 
it  was  a  subjective,  not  an  objective  hindrance,  and  that  the  real 
limit  was  not  rightly  taken. 


230  OBIQIN  AND  PEOQEESS  OF  ENGLISH  FAVPEEI8M, 

It  was,  when  this  acute  and  excellent  person  wrote,  conceived  to 
be  impracticable  to  reduce  haulage  charges  below  a  certain  cost, 
and  the  speed  of  transit  below  a  certain  time  rate.  That  an 
express  train  should  be  able  to  go  easily  and  safely  at  the  rate  of 
seventy  miles  an  hour  or  more,  that  the  cost  of  repairing  the 
permanent  way  should  be  reduced  to  a  third  in  amount,  and  that 
material  for  the  rails  of  the  future  should  be  almost  indestructible, 
and  that  such  economies  of  fuel  could  be  affected  that  the  same 
force  could  be  elicited,  or  a  superior  product  attained  by  a  third  of 
the  consumption  of  fuel  or  less,  was  not  anticipated.  No  one  can 
blame  a  writer  on  such  subjects  for  not  foreseeing  the  results  of 
modern  invention  and  skill ;  but,  on  the  other  hand,  no  one 
can  praise  him  for  assuming  that  the  present  conditions  were 
permanent.  The  elastic  band  of  which  he  speaks  is  far  less  rigid 
than  he  imagined,  as  time  has  proved. 

The  real  occurrence  of  something  like  a  coal  famine,  shortly 
after  Mr.  Jevons'  predictions  were  uttered,  and  were  endorsed 
by  Mr.  Mill,  seemed  to  give  reahty  to  the  forecast.  In  reality 
there  was  a  sudden  demand  for  fuel  power,  owing  mainly  to  the 
demand  which  arose  for  restoring  the  waste  of  a  peculiarly 
destructive  war  between  France  and  Germany,  and  the  consequent 
stimulus  which  the  void  occasioned  to  the  British  manufacturer, 
who  then  occupied  the  field  of  supply.  The  price  of  coal  rose 
rapidly,  and  every  one  who  had  property,  or  thought  he  had 
property  in  coal,  hastened  to  take  advantage  of  it.  My  friend  the 
late  Professor  Phillips  told  me  that  from  500  to  1000  square 
miles  of  new  coal-fields  were  discovered.  Nearly  double  the  number 
of  coal-pits  were  set  to  work,  and  the  production  of  the  article 
has  never  recovered  from  the  inflation.  I  remember  that,  three  or 
four  years  ago,  I  eat  on  a  committee  for  sixteen  days,  listening  to 
the  arguments  for  and  against  sixteen  miles  of  new  railway,  which 
was  to  pass  over  one  of  the  Yorkshire  coal-fields.  Every  landowner 
but  one,  whose  land  it  was  intended  to  pass  over,  was  favourable  to 
the  project,  and  we  passed  the  Bill,  though  with  some  modifications. 
The  Lords,  however,  threw  it  out.  Now  I  asked  one  of  the  land- 
owners who  wished  to  get  the  Bill,  Mr.  James  Lowther,  why  they 
set  so  much  store  by  it,  seeing  that  no  part  of  the  district  was 
more  than  2^  miles  from  an  existing  railway ;  and  he  told  me, 


PBODUCTIVENESS  TO  THE  ACRE.  231 

I  flo  not  doubt  with  perfect  accuracy,  that  such  was  the  com- 
petition, that  the  difference  of  profit  and  loss  on  working  lay- 
in  those  2^  miles  of  haulage.  I  shall  show  presently  to  what  course 
part  of  the  fall  in  price  is  due.  But  the  facts  are  an  instructive 
comment  on  Mr.  Jevons'  prediction  and  Mr.  Mill's  alarm. 

There  is  no  doubt  a  limit  in  the  production  of  corn  to  the  acre, 
but  no  one  has  discovered  what  the  limit  is.     It  may  be  that  the 
increase,  as  the  Ricardians  say,  can  only  be  obtained  at  a  greatei* 
relative  cost,  though  I  very  much  doubt  whether  such  a  fact  has 
ever  been  registered.     But  I  am  sure  that  no  one  has  yet  discovered 
what  is  the  maximum  producible  of  particular  crops,  under  favour- 
able conditions.    The  sewage  farm  of  Croydon  is  an  area  of  600 
acres,  a  light  and  not  otherwise  fertile  gravel.    But  being  irrigated 
by  the  drainage,  the  fertilizing  powers  of  which  it  completely 
exhausts,  and  discharges  as  pure  water,  it  will  grow  for   ten 
months  in  the  year  an  average  mouthly  crop  of   rye  grass  at 
the  rate  of  seven  tons  to  the  acre.     After  a  time  the  sewage  is  shut 
off  from  some  portions  and  oats  sown  on  the  land.     Of  these 
the  land  commonly  yields  a  good  100  bushels  to  the  acre.     It 
may  be  retorted  that  this  produce  is  exceptional.     I  will  give  you 
an  instance  in  ordinary  cultivation.     A  iriend  of  mine,  who  had  a 
large  London  estabHshment,  bought  a  country  seat,  with  fifty 
acres  of  land  about  it.    It  was  like  the  Croydon  farm,  a  light 
gravel,  which  readily  took  and  gave  back  what  fertihty  could  be 
bestowed  on  it.     My  friend  kept  a  very  large  quantity  of  stock. 
In  the  autumn  of  one  year  I  witnessed  the  preparation  of  one  of 
his  fields.     He  trenched  it,  every  four  feet,  with  trenches  two 
or  three  feet  deep,  filled  the  trenches  with  good  manure,   and 
levelled  the  ground.     In  the  spring  he  sowed  the  land  with  rye 
grass  and  vetches.     The  growth  was  so  rank,  that  when  I  went  to 
see  it  as  it  was  being  fed  by  sheep,  it  almost  reached  to  the  top  of 
the  hat  of  a  man  who  was  six  feet  high,  and  the  ground  grew  more 
than  twenty  tons  to  the  acre  of  green  food.    He  told  me  that 
the  husbandry  paid  him  well.     The    same   kind  of   reasoning 
will  apply  to  Sutton's  culture  at  Reading,  and  I  could  give  you 
instances  of  ordinary  farming  of  a  very  excellent  kind,  with  similar 
results. 

Similar  illustrations  may  be  given  about   the   cost  of  freight. 


282  OBIGIN  AND  PB0GBE88  OF  ENGLISH  PAUPEBISM. 

I  should  think  that  at  present,  notwithstanding  the  hindrances 
which  protective  regulations  have  put  on  international  trade, 
freights  by  rail  or  sea  do  not  cost  more  than  a  fifth  of  that  at 
which  they  stood  when  Mill  wrote.  The  ship  is  built  more  cheaply. 
Bails  more  safely  and  more  quickly,  consumes  less  coal,  requires 
fewer  hands,  and  is  laded  or  unladen  far  more  rapidly  than  it  was 
a  few  years  ago.  The  low  cost  of  freight  is  alleged  by  Mr.  David 
Wells,  one  of  the  ablest  American  writers  on  economical  subjects, 
to  be  the  principal  cause  in  the  fall  of  market  prices  for  heavy 
goods,  no  doubt  a  matter  of  severe  competition  to  the  British 
farmer,  but  of  infinite  interest  to  the  British  consumer,  and  not  a 
little  to  the  manufacturers,  to  whom  cheap  material  is  a  benefit  of 
the  first  importance.  Now  a  diminished  cost  of  freight  is  a  lessened 
charge,  and  though  profits  may  seem  to  fall,  chiefly  in  relation  to 
the  estimate  made  of  fixed  capital,  and  the  interest  which  it  is 
calculated  to  bear,  the  prices  of  manufactured  goods  do  not 
tend  to  fall  in  the  same  proportion  that  the  price  of  the  material 
falls. 

Now  these  results  are  brought  about  by  two  motives,  which  are 
the  inevitable  outcome  of  free  competition.  People  have  a  habit 
of  saying  that  competition  lowers  prices.  If  it  does  so,  in  the 
manner  that  I  am  about  to  describe,  the  lessening  of  price  is 
never  equal  to  the  lessening  of  cost,  and  lowered  price  may  after 
all  mean  increased  profit.  Over  and  over  again  people  have  found 
that  fortunes  have  been  rapidly  made  because  prices  have  been 
lowered,  while  profits  have  been  heightened.  These  two  motives 
are — (1)  The  motive  to  save  labour  ;  (2)  The  motive  to  save  cost. 
Thus  when  mechanism  is  employed  in  place  of  labour,  labour  is 
saved.  When  the  force  needed  to  bring  about  a  result  is  lessened, 
or  the  time  interposed  between  the  process  and  the  profit  is 
shortened,  there  is  a  saving  of  cost.  It  does  not  follow  that  the 
wages  of  labour  are  reduced,  because  the  cost  of  labour  is  lessened. 
On  the  contrary,  it  is  generally,  perhaps  invariably,  found,  that  if 
the  efiiciency  of  labour  is  increased,  the  wages  of  labour  are 
bettered  ;  for,  first,  profits  are  increased,  and  there  arises  a  com- 
petition for  the  profit-making  agent ;  and  next,  efficiency  is  a 
kind  of  fertility ;  nay,  the  best  kind,  perhaps  the  only  kind  of 
fertility,  and  therefore  has  to  be  paid  for.    It  by  no  means  follows 


THE  SAVING  OF  LABOUB  AND  COST.  233 

that  "when  competition  drives  down  profits,  the  wages  of  skilled 
labourers  are  also  lessened.  Their  number  cannot  be  suddenly 
increased,  and  when  competition  is  keen,  under  the  conditions  of 
modem  manufacture,  the  demand  for  their  services  may  be 
heightened  as  long  as  it  is  a  demand. 

So  again  with  the  saving  of  cost.  All  processes  of  invention, 
as  opposed  to  the  discovery  of  new  powers  in  substitution  of  labour, 
save  cost.  In  Siemens'  furnace,  for  instance,  greater  efficiency  is 
obtained  and  with  less  expenditure  of  fuel.  In  Bessemer's  process 
for  the  manufacture  of  steel,  the  material  is  made  to  purify  itself^ 
by  the  combustion  of  injurious  admixtures.  The  substitution  of  the 
hot  for  the  cold  blast,  and  a  thousand  other  examples  may  be  given 
of  the  saving  of  cost,  and  hundreds  of  people,  engaged  in 
engineering  and  similar  callings,  are  constantly  busy  in  striving  to 
get  greater  results  at  less  cost.  Now  it  is  probable  that  new 
machinery  and  even  saving  of  cost  may  shorten,  even  extiuguish, 
employment.  Economists  cannot  get  themselves,  it  seems,  out  of 
the  pernicious  habit  of  treating  all  forms  of  capital  and  labour  as 
equally  mobile,  because  they  always  have  in  their  mind  balances 
at  a  bank,  which  can  be  readily  transferred,  and  accountants  who 
can  do  as  well  in  a  merchant's  office  as  at  a  banker's.  Hand-loom 
weavers  were  ruined  by  the  power-loom.  Domestic  industries  have 
been  extinguished  by  manufactures.  No  doubt  railroads  injured 
coach  builders,  as  they  did  canals  and  turnpike  roads.  Nor  must 
we  conclude  that  it  is  a  good  thing  to  dispense  exceedingly  with  human 
labour,  any  more  than  it  is  with  human  employments.  Perhaps  a 
better  rent  is  got  for  land  as  deer  forest  than  for  land  as  occupation 
ground  for  cottars.  But  unless  the  gains  of  the  individual  are 
to  override  every  other  consideration,  it  is  a  very  arguable  question 
whether  the  state  should  permit  such  a  kind  of  occupancy  as 
drives  out  man.  The  defence,  and  it  is  generally  in  the  long  run, 
a  good  defence  for  invention  and  substituted  forces,  is  that  in  a  very 
short  time  labour  is  merely  displaced,  occupation  is  really  increased, 
and  the  conveniences  of  life  are  multiplied  and  cheapened.  But  in 
a  deer  forest,  only  the  first  of  three  ends  is  achieved.  I  hope  that 
I  have  sufficiently  illustrated  my  statement,  that  while  Production 
is  limited  by  law  and  nature,  the  limit  is  not  easily  discoverable, 
and  the  power  of  adapting  the  processes  of  industry  to  these  laws, 


234  OBIGIN  AND  PBOGBESS  OF  ENGLISH  PAUPEEISM. 

is  and  will  remain  unknown,  and  I  tliouglit  it  best,  in  discussing 
'  the  subject  of  English  pauperism,  to  preface  what  I  had  to  say 
I  by  a  short  account  of  the  relations  of  labour  and  capital  to  pro- 
duction ;  for  it  is  in  the  earlier  stages  of  invention  and  improved 
production  in  England,  delayed  in  a  singular  manner  in  this 
country,  that  the  worst  and  the  most  lamentable  exhibitions  of 
English  pauperism  were  made  manifest,  and  at  last  became 
intolerable,  after  having  been  long  scandalous. 

Even  though  they  make  them  too  rigid,  economists  are  agreed 
that  the  laws  of  production  are  laws  of  nature,  those  of  the  dis- 
tribution of  wealth  of  human  institution,  wholly  or  mainly.  By 
distribution  is  meant  that  part  of  the  gross  product  which  is 
received  by  each  of  the  contributors  to  the  partnership.  By 
saying  that  the  laws  of  distribution  are  of  human  institution  only, 
economists  intend,  not  that  products  are  of  necessity  arbitrarily 
assigned  to  each  of  the  agents,  but  that  the  whole  product  being  in 
the  power  of  man  in  society,  they  could  be  distributed  (not  indeed 
to  the  total  exclusion  of  one  among  the  contribute ries,  for  in  that  case 
the  others  would  perish)  according  to  the  discretion  of  those  forces 
which  are  and  must  exist  in  order  to  constitute  a  society,  in  such 
proportions  as  those  who  undertake,  usurp,  or  are  intrusted  with 
the  administration  of  society  may  determine.  These  parties  are 
four — the  recipient  of  interest,  the  superintendent  of  labour,  the 
labourers  ordinarily  so-called,  and  the  recipient  of  rent.  For 
reasons  already  stated,  the  second  and  third  of  these  are 
analytically  one,  though  in  the  distribution  of  the  product,  the 
second  may  be  able  to  secure  great  advantages  over  the  third. 
Again  the  first  and  second  may  merge  in  the  same  person.  The 
superintendent  of  labour  may  be  a  capitalist  employer,  who  is 
indebted  to  no  one  for  a  particle  of  the  capital  which  he  employs  in 
his  calling.  In  general,  however,  and  especially  in  modem  times, 
a  great  amount  of  business  is  carried  on  with  borrowed  capital. 

Now  in  point  of  fact,  if  credit  is  maintained,  interest  is  secured, 
and  seems  to  be  first  paid  out  of  profits  or  products.  But  it  must 
be  paid  after  labour,  whether  it  be  that  of  the  superintendent  or 
workman,  is  at  least  kept  aUve.  In  short,  interest  on  advances  or 
loans  is  due  to  an  anticipation  that  labour  will  be  productive 
enough,  after  it  has  been  kept  going,  to  leave  enough  to  satisfy  the 


THE  OBDEB  OF  PAYMENT,  285 

lender.  This  is  equally  true  if  the  capital  is  actually  borrowed, 
or  introduced  into  the  calling  by  the  superintendent  of  workmen. 
If  such  a  satisfaction  is  not  accorded,  the  loan  rapidly  passes  from 
the  active  into  the  passive  form  of  wealth,  is  hoarded  instead  of  being 
lent.  If  the  insecurity  of  compensation  is  so  great  that  people 
who  have  wealth  will  not  lend  it,  the  disposition  to  hoard  will  be 
intensified,  and  the  reason  is  that  the  motive  for  saving  is  the  pro- 
vision against  emergencies,  and  that  this  feeling  is  stronger  and 
more  enduring  than  saving  for  the  sake  of  profit  on  loans.  It  is  a 
mistake  with  many  economists  to  say  that  saving  is  due  to  the 
desire  of  profit.  If  people  could  get  no  profit  or  but  a  small  profit 
or  interest,  they  could  still  save,  perhaps  save  all  the  more,  for  it 
is  found  necessary,  with  prudent  people,  to  save  for  the  sake  of 
security,  and  we  may  be  sure  that  people  saved  and  hoarded  with  the 
greatest  energy,  before  they  could  find  the  people  whom  they  could 
trust  as  borrowers ;  and  similarly,  a  very  low  rate  of  interest  stimu- 
lates saving. 

Now  it  is  generally  said  that  the  last  of  the  whole  four  to  be 
paid  is  the  recipient  of  rent.  And  this,  when  in  a  society  the 
distribution  is  effected  by  competition  only,  is  certainly  the  case. 
Rent,  it  is  alleged,  cannot  arise  till  the  others  are  satisfied  or  at 
least  paid.  Hence  it  is  said,  and  with  general  correctness,  that 
rent  does  not  enter  into  price,  and  Adam  Smith  was  adversely 
criticised  for  saying  that  it  did,  for  it  was  alleged  that  rent  was  the 
result  of  price.  This  is  true,  even  in  those  cases  which  some 
economists  have  been  inclined  to  except,  as  the  rent  of  factories 
and  shops.  Now  setting  aside  the  payment  made  for  the  building, 
which  is  no  more  really  a  rent  than  payment  made  for  the  use  of 
machinery  or  tools  is,  however  great  the  rent  of  sites  or  ground 
rents  may  be,  we  shall  be  quite  safe  in  assuming,  that  there  is  an 
advantage,  technically  called  a  fertility,  in  particular  sites,  which 
induces  the  person  who  hires  the  ground  to  give  more  for  it  than 
he  would  for  a  piece  which  has  less  advantage  or  attraction.  Rent 
is  paid  for  fertility,  that  is  for  qualities  which  enable  the  occupier 
to  pay  more  out  of  his  produce  than  is  sufficient  to  pay  interest, 
wages,  and  profits. 

But  though  Adam  Smith's  statement  was  not  economically 
sound,  it  was  not  historically  incorrect.      Undoubtedly  in  the 


236  ORIGIN  AND  PBOGBESS  OF  ENGLISH  PAUPEBISM. 

earlier  stages  of  this  and  other  societies,  rent  was  a  tax,  levied  by 
downright  force,  either  without  the  pretence  of  an  equivalent,  or 
as  the  representative  of  reciprocal  advantage,  as  defence,  and 
payment  for  administration,  or  as  mere  blackmail,  the  rent 
receiver,  in  consideration,  refraining  from  plunder.  And  this  is,  I 
think,  the  origin  of  the  old  law  of  distress,  under  which,  when 
the  tenant  failed  to  pay  his  rent,  the  landlord,  or  overlord,  was 
entitled  to  seize  his  chattels  on  that  part  of  his  holding  from  which 
the  rent  issued.  I  have  often  found  that  rents  in  old  accounts  are 
put  under  bad  debts,  because  the  lord's  agent  "  did  not  know  on 
what  land  to  distrain." 

Hence  you  will  observe  that  an  economic  rent  might  totally  dis- 
appear, and  no  one  but  the  former  recipient  of  rent  be  any  the  worse, 
but  every  one  also  all  the  better.  Eent  is  no  matter  of  concern  to 
any  one  but  the  landowner,  just  as  any  other  kind  of  revenue-bearing 
property  is,  which  becomes  obsolete  and  unprofitable,  as  a  canal  no 
longer  used.  If  the  earth  brought  forth  so  abundantly  and  so 
readily  for  those  who  consumed  its  products,  that  the  price  reaHzed 
for  the  sale  of  agricultural  produce  was  only  sufficient  to  pay  th 
cost  of  cultivation,  of  collection,  and  of  exchange,  there  would  be  no 
place  for  rent.  In  an  ideal  state  of  plenty  there  would  be  no 
economic  rent.  I  say  ideal,  for  in  experience  even  the  most  fertile 
countries  pay  rents.  If  land  were  all  equally  fertile,  as  long  as 
demand  raised  the  price  of  farm  produce  above  cost  and  exchange, 
there  would  be  rent,  though  MacCulloch,  who  was  a  demented 
Kicardian,  said  it  would  not.  But,  on  the  other  hand,  everything 
which  tends  to  diminish  rent  by  plenty  and  cheapness  approaches 
in  its  degree  that  ideal  condition  in  which  land  is  so  fertile  and  so 
abundant  that  there  is  no  place  for  rent.  Of  course  they  who  have 
hitherto  received  rent  fancy  that  when  it  falls  or  is  reduced,  the 
country  is  going  to  ruin,  but  they  who  buy  agricultural  produce 
know  better.  No  doubt,  if  I  were  a  great  recipient  of  rent,  I  should 
find  it  difficult  to  reconcile  my  interests  with  my  convictions ;  as  it  is, 
I  can  afford  to  be  an  entirely  dispassionate  economist. 

You  will  observe  that  I  do  not  quarrel  with  rent.  I  find  no  fault 
with  it,  and  I  would  not  interfere  with  it,  unless  under  certain 
circumstances,  which  I  shall,  I  trust,  make  plain  to  you.  It  is  not, 
however,  a  sacred  right,  but  the  result  of  certain  natural  facts,  as 


THE  POSITION  OF  BENT.  287 

natural  as  labour,  waste,  and  friction  are.  It  comes  out  of  the 
limitation  of  human  happiness  as  a  doctor's  fees  do  out  of  the 
limitation  of  human  health.  Still  less  would  I  counsel  either  its 
confiscation  as  Mr.  George  does,  or  its  compulsory  purchase  as  Mr." 
Mill  did.  The  former  policy  I  think  would  be  an  injustice,  the 
latter  would  be  a  folly,  or,  to  be  more  strictly  economical,  an  unwise 
bargain.  If  we  had  bought  the  English  landlords  out,  more  than 
fifteen  years  ago,  when  Mr.  Mill  was  insisting  on  the  unearned 
increment,  every  one  who  knows  anything  about  present  English 
rents,  would  agree  with  me  in  thinking  it  a  most  incautious  pro- 
ceeding. It  is  true  that  the  landowners  treated  Mr.  Mill's  proposal 
as  one  of  confiscation.  Their  opinions  are  probably  altered  now. 
But  they  cling  to  the  Kicardian  theory  that  high  prices  cause  high 
rents,  and  are  still  expecting  the  unearned  increment.  In  my 
opinion  it  is  as  much  vanished  as  the  feudal  system  is.  But  the 
reduced  cost  of  freight  is  not  the  only  cause  of  their  declining  pros- 
perity, as  I  have  already  shown.  And  here  I  may  observe  that 
there  is  one  advantage  which  the  condition  of  a  person  who  is  at 
once  owner  and  cultivator  possesses,  and  yet  has  escaped  the  notice 
of  economists,  that  he  is  to  some  extent  removed  from  the  risk  of 
one  or  more  of  those  artificial  laws  which  regulate  the  distribution 
of  wealth.  He  is  not  so  much  affected  by  high  and  low  prices  as 
the  rent  receiver  is,  for  he  lives  on  the  labour  of  his  own  hands, 
for  the  greater  part  of  his  expenditure. 

Now  as  I  have  already  told  you,  interest  always  tends  to  diminish 
as  wealth  increases,  on  the  presumption  that  men  are  honest  in 
their  contracts.  The  reason  is  that  on  the  desire  of  accumulation 
for  the  sake  of  safety  comes  at  a  subsequent  stage  a  desire  of 
accumulation  for  the  sake  of  income,  the  principal  remaining  intact. 
Now  if  laws  such  as  usury  laws  meddle  with  the  latter  and  later 
tendency,  they  may  tend  to  drive  the  latter  into  the  former  impulse, 
and  80  raise  the  rate  of  interest,  while  their  object  has  been  to 
lower  it.  One  great  seiTice  among  many  which  Bentham  did  was  to 
point  out  what  usury  laws  were  doing.  At  last  they  were  abohshed. 
It  was  seen  to  be  inexpedient  in  the  interest  of  borrowers,  and 
uhimately  in  the  interest  of  lenders  to  regulate  the  rate  of  interest 
by  law,  to  make  the  laws  of  human  institution  meddle  with  loans. 
At  the  same  time,  it  is  clear  that  if  money  contracts  are  rigidly  en- 


238  OBIGIN  AND  PB0GBES8  OF  ENGLISH  PAUPEBISM, 

forced,  a  bankruptcy  law,  to  include  all  debtors,  becomes  necessary. 
The  usury  laws  cut  down  the  interest  of  the  loan,  the  bankruptcy, 
the  principal.  But  though  in  my  opinion  there  is  no  economic  diffe- 
rence between  a  usury  and  a  bankruptcy  law,  for  both  are  regulations 
of  free  contracts,  there  is  a  great  practical  difference.  In  the  usury 
law  the  state  regulates  the  contract,  by  a  theoretically  rigid  rule. 
In  the  bankruptcy  law  equity  regulates  the  contract,  and  by  a 
variable  rule.  Besides  in  the  bankruptcy  law,  the  creditor  blames 
himself ;  under  usury  laws,  the  creditor  blames  the  law. 

Now  it  is  quite  possible  for  human  societies,  acting  on  the  rule 
that  the  distribution  of  wealth  is  of  human  institution  only,  to 
seriously  curtail  rent.  There  is  already  a  school,  which  diligently 
teaches  that  rent  is  a  fraud,  an  extortion,  a  misappropriation  of  the 
wealth  which  labour  has  created.  It  is  not  improbable,  as  the  real 
origin  of  rent  becomes  better  known,  that  these  opinions,  however 
unjust,  unfair,  destructive,  may  grow  in  intensity  and  work  evil  ; 
for  landowners  in  England  are  not  conciliatory,  claim  very  unjust 
privileges,  and  having  made  tJieir  gain  out  of  the  industry  of  society, 
strain  every  effort  to  further  plunder  the  society  to  which  they 
owe  so  much.  They  talk  of  the  burdens  on  land,  which  are  light, 
and  should  be  heavy,  for  a  spontaneous  giowth  of  wealth,  to  the 
origin  and  increase  of  which  the  fortunate  owner  has  contributed 
nothing,  is  a  peculiarly  just  subject  of  taxation,  and  not  as  it  is  in 
the  United  Kingdom,  a  peculiarly  favoured  subject  of  exemption. 
But  except  in  the  protection  of  some  occupiers  from  outrageous 
pillage,  the  state  has  not  used  its  powers  over  rent,  or  the  receiver 
thereof. 

It  has  been  found  disastrous  to  meddle  in  the  interest  of  the 
rent  receiver  with  interest  and  profits.  With  interest  it  has  not 
meddled  directly,  though  the  mortgagor  is  treated  with  more 
consideration  than  any  other  debtor  is,  for  he  has.  to  bear  no  such 
loss  as  an  ordinary  debtor  does,  if  his  pledge  is  depreciated,  and  is 
assisted  by  what  is  called  the  equity  of  redemption,  in  case  he 
makes  default  in  his  payments,  and  his  pledge  is  forfeited.  But 
that  form  of  interest  and  profit  which  is  anticipated  from  the 
employment  of  farmer's  capital  is,  and  long  has  been,  at  the  mercy 
of  the  rent  receiver,  as  I  have  already  shown  you,  and  it  is  because 
the  profits,  interest,  and  capital  of  the  farmer  have  been  absorbed 


TEE  POSITION  OF  THE  BENT-BECEIVEB.  239 

by  aggressive  rents,  for  some  of  the  consequences  of  whicli  the 
farmer  is  responsible,  that  the  present  unfortunate  state  of  agri- 
culture, the  present  depression  of  trade,  and  in  particular  the  serious 
stagnation  of  the  home  market  are  due.  True  to  their  instincts,  the 
landowners  are  seeking  to  retrieve  the  consequences  of  their  own 
action,  and  their  own  selfishness,  by  demanding  further  sacrifices 
from  the  general  public,  the  relief  of  themselves  from  their  just 
liabilities,  and  the  imposition  of  food  taxes  on  the  general  public. 
I  have  a  strong  conviction  that  if  they  are  not  wise  in  time,  their 
latter  end  will  be  worse  than  their  present  state. 

It  has  been  possible  and  easy  for  the  legislature  to  employ  its 
powers  in  the  distribution  of  wealth  in  the  direction  of  lessening 
the  share  of  the  recipient  of  wages  by  positive  enactments,  and  for 
it  to  lessen  both  profits  and  wages  in  the  interest  of  rent.  It  has 
been  possible  for  the  legislature  to  deceive  the  recipient  of  profits 
so  entirely  by  plausible  statements,  as  to  make  him  an  accomplice 
in  the  oppression  of  the  workman,  and  in  the  end  to  devote  his  own 
energies  and  powers  to  the  oppression  of  himself.  When  forty 
years  ago,  the  mass  of  Englishmen  threw  off  the  old  restrictive 
laws  which  were  intended  to  promote  the  artificial  exaltation  of 
rent,  they  had  become  alive  to  the  iniquity  of  the  system ;  now  it 
seems  some  of  the  people  are  apparently  being  gulled  by  the 
sophisms  from  which  their  fathers  freed  themselves.  They  seem 
to  think  too  that  they  can  persuade  the  workmen  that  artificially 
high  prices,  i.e.,  prices  which  stint  supply,  will  make  better  wages, 
and  give  more  employment.  This  state  of  things  will  lower  wages 
absolutely  and  relatively,  and  stint  employment. 

Now  I  have  told  you  how,  for  200  years  and  more,  the  representa- 
tives of  rent  tried  to  depress  wages  by  force  of  law,  in  the  interests 
of  rent  and  failed.  So  complete  was  the  failure  that  in  1495,  the 
legislature  enacted  that  scale  of  wages  for  which  the  workmen  had 
contended,  and  so  left  them  in  the  possession  of  the  situation.  The 
workman  had  his  trade  union  and  benefit  society  in  the  guild  to 
which  he  belonged,  an  institution  which  I  shall  attempt  to  describe 
hereafter.  The  condition  of  the  country  was  eminently  one  of  small 
holdings.  In  a  Surrey  village,  Tandridge,  some  of  the  history  of 
which  I  shall  often  refer  to,  there  were,  in  1600,  forty-nine 
owners  or  occupiers,  whose  average  holding  is  nineteen  and  a  hall 


240  OBIGIN  AND  PBOGBESS  OF  ENGLISH  PAUPEBISM. 

acres,  and  I  have  no  doubt  that  such  holdings  continued  for  more 
than  a  century  longer.  A  peasant  who  has  land  is  in  a  much  better 
position  to  make  an  independent  contract  for  his  labour  than  one 
who  is  landless.  The  landowners  and  farmers  know  this.  They 
have  contrived  to  dispossess  the  peasants  of  all  interest  in  the  soil, 
and  they  do  their  best  to  keep  them  landless  now.  In  an  earlier 
lecture  I  gave  you  an  account  of  the  numerous  Acts  of  legislation 
by  which  the  landowners  in  Parliament  strove  to  depress  the 
labourer's  condition,  but  in  vain.  I  am  now  dealing  with  the 
circumstances  which  secured  their  success,  and  followed  on  it. 
Now  the  circumstances  which  led  to  this  total  rout  and  subjection 
/  /  of  the  workmen  were,  first,  the  deluge  of  base  money.  The  amount 
of  this  was  equal  to  the  average  coinage  of  gold  and  silver  for  any 
seven  years  dm^ing  Elizabeth's  reign,  and  was  almost  certainly 
equal  to  any  ten  years'  coinage  of  her  father's  reign.  When  base 
money  is  put  into  circulation  by  rulers,  the  heaviest  loss,  nearly 
^  the  whole  loss,  falls  on  the  poor.  This  is  what  makes  the  crime  of 
the  smasher  so  peculiarly  infamous.  Then  came  the  confiscation 
of  the  guild  lands,  and  the  loss  of  all  the  benefit  society's  funds,  an 
act  of  embezzlement  of  which  Somerset  was  guilty,  who  added  the 
L  crime  of  hypocrisy  to  that  of  robbery,  for  his  plea  was  that  the 
endowments  were  devoted  to  superstitious  ends.  Next  comes  the 
inevitable  rise  in  prices,  irow  if  labour  was  as  free  as  the  winds,  it 
cannot  made  head  against  heightened  prices,  a  fact  which  I  make 
no  doubt  Fair  Traders  know  perfectly  well,  when  they  seek  to  delude 
working-men  with  the  falsehood  that  high  prices  bring  high  wages. 
Provisions  rose  2f  times  ;  that  is,  16-6  shillings  after  the  change 
went  no  further  than  6s.  did  before,  and  wages  remained  nearly 
unchanged.  Finally,  came  the  statute  5  Elizabeth  cap.  4,  under 
which  the  labourer's  and  artizan's  wages  were  fixed  by  Quarter 
Sessions  assessments,  severe  penalties  being  denounced  against  those 
who  took  more  or  gave  more  than  the  justices  allowed. 

This  famous  Act,  which  consummated  the  degradation  of  the 
poor,  made  pauperism  inevitable,  and  misery  universal,  was  really 
no  new  legislation.  The  Act  repealed  all  the  old  statutes  of 
labourers,  and  re-enacted  all  the  provisions  of  those  Acts.  It  did 
not  provide  any  new  machinery,  for  the  administration  of  the  old 
laws  had  been  in  the  hands  of  the  justices  for  nearly  the  whole  200 


9 


THE  CAUSES  WHY  WAGES  WERE  DEPBESSED,      241 

years,  and  sometimes  the  right  of  making  the  assessment.  What 
it  did  was  to  seize  the  opportunity,  when  the  workmen  were  help- 
less, to  consolidate  all  the  old  statutes,  to  draw  up  rigid  rules  of 
apprenticeship,  so  as  to  make  agricultural  the  residuum  of  all 
labour,  to  enact  exhaustive  penalties,  and  to  leave  no  loophole 
through  which  workmen  could  escape,  so  as  to  better  themselves 
in  the  struggle  with  their  employers.  The  English  Statute  Book 
contains  many  atrocious  Acts,  most  of  them  with  hypocritical  pre- 
ambles. This  Act  of  Ehzabeth  is,  in  my  judgment,  the  most 
infamous  of  them,  for  it  was  levelled  against  every  right  of  the 
poor,  even  of  the  poor  to  live,  and  entirely  in  the  interest  of  rent. 

The  magistrates  duly  met,  and  issued  their  schedules  of  wages. 
I  have  discovered  thirteen  of  them,  and  perhaps,  hereafter,  more 
will  be  found.  They  invariably  prescribe  wages  which  I  am  sure, 
from  the  evidence  of  prices,  would  not,  even  if  the  peasant  had 
continuous  employment,  find  bread  for  him  and  his  household.  It 
was  inevitable  that  he  should  be  driven  on  private  or  public  charity, 
on  the  alms  of  the  generous,  or  on  taxes  levied  for  his  maintenance 
on  all  occupiers.  It  is  some  satisfaction  to  find  that,  despite  these 
penalties,  the  wages  actually  paid  were  a  good  deal  above  the 
justices*  assessments.  Employers  were  more  generous  than  the 
"little  tyrants  of  the  fields.''  Thus  out  of  seven  assessments 
between  1593  and  1684,  the  average  allowances  for  eight  kinds  of 
labourers  and  artisans,  three  of  the  former  and  five  of  the  latter, 
were  3s.  O^d.,  3s.  O^d.,  4s.  Ofd.,  5s.  3d.,  7s.  Ofd.,  7s.  Hid.,  5s.  3d. 
a  week.  The  average  of  wages  actually  paid  was  5s.  4^d.,  5s.  2id., 
5s.  5  Jd.,  5s.  9d.,  7s.  5d.,  8s.  l^d.,  and  8s.  3d.  It  should  be  noted  that 
the  highest  assessments  were  made  during  the  Commonwealth,  and 
that  an  attempt  was  made  to  reduce  wages  after  the  Restoration. 
The  labourers,  as  far  as  the  will  went,  were  better  off  under  the 
rule  of  the  saints  than  they  were  under  that  of  the  sinners. 

Legislation  for  the  relief  of  the  poor,  at  first  by  voluntary  con- 
tributions, began  with  the  year  1541.  Between  this  date  and  1601 
inclusive,  when  the  famous  and  permanent  statute  of  Elizabeth  was 
enacted,  there  were  twelve  Acts  of  Parliament  passed  with  the 
distinct  object  of  providing  relief  against  destitution.  These  Acts, 
which  are  a  very  instructive  study  for  the  economical  history  of 
England,  can  be  found  in  the  contemporary  issues,  a  complete  set 

17 


242  OBIOIN  AND  PB0GBES8  OF  ENGLISH  PAUFEIUSM. 

of  which  is  excessively  rare — our  copy  in  Bodley  being  to  some 
extent  defective — and  in  the  folio  re^jrint — copies  of  which,  the 
volumes  extending  from  the  earliest  times  to  the  conclusion  of 
Anne's  reign,  were  sent  by  the  express  authority  of  Parliament  to 
the  college  libraries  of  Oxford  and  Cambridge.  In  ordinary  col- 
lections of  these  statutes,  they  are  omitted  as  repealed  or  obsolete. 

Now  it  was  at  first  believed  that  private  benevolence  would  fill  up 
the  void  in  wages  which  bad  government  had  made.  But  private 
benevolence  can  never  grapple  with  a  national  calamity,  even  if  it  is 
very  active  "When,  moreover,  the  head  of  the  state  is  rapacious,  lying, 
extravagant,  reckless,  and  dishonest,  ordinary  human  nature,  espe- 
cially when  it  is  severely  pinched  by  the  exhibition  of  these  vices  on 
a  gigantic  scale,  is  more  apt  to  loyally  imitate  them  than  to  remedy 
the  mischiefs  which  they  have  ocasioned.  Still  it  is  possible  that 
Henry  and  his  son's  guardians  fancied  that  private  charity  would 
fill  the  void.  The  "  Supplication  of  the  Beggars  "  calculates  that  the 
alms  given  to  the  begging  friars  amounted  to  £45,333  6s.  8d. 
annually,  and  if  people  would  give  so  much  to  the  professors  and 
teachers  of  a  creed  which  the  king  had  dispossessed  and  proscribed, 
surely  they  would  give  as  much  to  misery  and  poverty.  But  it  has 
been  constantly  found  that  men  will  give  to  what  they  believe  to  be 
a  religion  far  more  freely  than  they  will  to  what  they  know  to  be 
want,  and  perhaps  with  reason ;  for  it  is  very  difficult  to  distinguish 
between  want  and  fraud,  between  real  distress  and  simulated 
poverty.     It  is  certain  that  the  anticipation  was  disappointed. 

These  statutes  were  of  various  character.  At  first  they  only 
claimed  voluntary  gifts,  collections  in  churches,  made  at  first  in 
Midsummer,  afterwards  more  prudently  postponed  to  Christmas. 
Very  soon  the  appeal  for  voluntary  aid  was  followed  by  exhortations 
to  the  richer  folk  to  give  of  their  abundance.  Soon  the  caitiff  who 
would  not  give  was  to  be  delated  to  the  bishop,  who  was  to  exhort 
him.  In  Mary's  reign,  obstinate  covetousness  thus  reported  was, 
it  seems,  to  be  considered  a  suspicion  of  heresy,  and  inquiries  were 
to  be  made  Very  soon  compulsion  followed.  The  rich  but 
covetous  man,  who  remained  obdurate,  was  to  be  sent  to  gaol,  and 
an  assessment  levied  on  his  goods.  Finally,  a  general  assessment 
was  ordered. 
I  have  been  fortunate  enough  to  recover,  and  have  printed  one 


THE  ACTS  FOB  THE  BELIEF  OF  THE  POOB,        243 

of  these  assessments.  It  is  a  rate  levied  on  the  parish  of  Tandridge, 
for  the  relief  of  the  poor  and  of  maimed  soldiers,  besides  other 
objects,  such  as  the  maintenance  of  prisons  and  hospitals.  The 
nnit  of  assessment  is  a  penny  an  acre,  and  the  justices  direct  that 
only  one  rate  a  year  shall  be  levied  on  owners  and  occupiers  of 
under  ten  acres,  twice  a  year  on  those  above  ten  and  below  thirty, 
all  additional  assessments,  if  required,  being  paid  by  those  who  had 
over  thirty  acres.  The  system  was  therefore  one  of  graduated 
taxation.  But  the  rate  provides  that  if  the  occupier  has  little  land, 
but  a  good  house,  he  shall  not  be  exempted  from  a  tax  which  is  not 
to  be  too  heavy  on  the  poorer  tenants. 

The  fact  that  laws  for  the  relief  of  the  poor  were  enacted  after 
the  Dissolution  of  the  monasteries  has  led  some  writers  to  connect 
them  with  this  event.  Others  have  pointed  out,  perhaps  to  relieve 
the  Eeformation  from  these  odious  features,  that  poverty,  for  which 
the  state  was  anxious,  existed  before  this  action  of  Henry.  I  dare 
say  that  the  Dissolution  aggravated  the  evil.  It  is  possible  that 
sheep -farming,  rent-raising,  and  attempts  to  aggregate  farms  may 
have  increased  the  mischief.  But  I  am  entirely  convinced  that  the 
four  causes  given  above  are  amply  sufficient  to  account  for  it. 

The  Act  of  1601  was  at  first  temporary  only,  being  enacted  from 
Parliament  to  Parliament,  and  therefore  regularly  included  in  the 
continuance  Acts.  But  there  is  no  reason  to  believe  that  the  legis- 
lature from  the  first  ever  thought  that  the  system  of  legal  relief 
could  be  abandoned.  It  was  impossible,  with  the  experience  of 
prices  constantly  rising,  and  with  the  system  of  justices'  assess- 
ments in  full  operation,  to  contemplate  the  diminution  of  destitution 
as  within  the  range  of  a  probability.  In  course  of  time,  the  doctrine 
began  to  take  root,  that  as  the  poor,  when  in  want,  lived  from  the 
land,  they  could  not  be  wronged,  if  they  were  deprived  of  every 
other  interest  in  the  land,  as,  for  example,  commonable  rights 
of  pasture.  The  song  which,  while  it  bade  the  rustic  **hang 
sorrow  and  cast  away  care,"  also  declares  that  the  parish  "was 
bound  to  find  them,"  is  much  more  the  abandonment  of  despair 
than  an  outcome  of  contented  thankfulness.  The  Act  of  Elizabeth, 
rendered  perpetual  at  the  Restoration,  was  substantially  the  law 
for  the  relief  of  the  poor  till  1835. 

I  do  not  know  that  there  can  be  alleged  an  economical  defence 


244  ORIGIN  AND  PBOGBESS  OF  ENGLISH  PAUPEBISM, 

for  the  relief  of  destitution.  It  does  not  seem  to  me  that  Mr. 
Mill's  argument,  that  the  individual  man  is  not  responsible  for  his 
own  existence,  makes  a  very  strong  case  for  the  i^sponsibility  of 
those  .who  are  no  more  concerned  in  such  a  person's  existence  than 
he  is,  nor  do  I  think,  if  we  could  conceive  a  state  of  things  in 
which  the  maintenance  of  the  destitute  became  an  intolerable  bur- 
den, that  the  argument  would  be  cogent.  Assume  a  contingency 
in  which  the  struggle  for  existence  leaves  no  margin  for  those  who 
work,  and  I  do  not  think  that  men  would  elect  to  starve  themselves 
on  behalf  of  those  who  do  not  or  cannot  work.  But  defective  as 
the  economical  defence  of  the  legal  relief  of  distribution  is,  the 
moral  and  political  defence  of  the  practice  is,  I  think,  over- 
whelmingly strong.  The  loss  which  every  solvent  ratepayer  bears 
in  relieving  others  is  cheaply  purchased  by  the  law  which  prevents 
the  hardness  and  indifference  which  would  ensue  if  one  were 
familiar  with  the  sight  of  unrelieved  distress.  The  cultivation  of 
that  habit  of  mind,  under  which,  in  spite  of  one's  being  compelled 
to  make  a  sacrifice  in  order  to  effect  the  result,  men  are  indignant 
at  the  poor  perishing  for  lack  of  bread,  is  of  no  little  social  value. 
The  struggle  after  comparative  abundance,  or  the  competition  of 
those  engaged  in  the  struggle,  is  studied  by  the  economist,  who 
discusses  its  conditions  and  its  issues.  But  the  moralist  is  glad 
when  the  struggle  is  suspended,  or  some  of  its  fruits  are  aban- 
doned, in  order  that  those  who  fail  in  the  effort  may  live.  So  too, 
the  politician  or  statesman,  who  wishes  that  the  mechanism  of  that 
society,  whose  affairs  he  administers,  may  move  with  the  least 
friction,  knows  that  the  despair  of  those  who  are  famishing,  though 
he  may  be  able  to  curb  its  outbreaks,  is  a  discredit  always,  and  may 
become  a  danger.     Here,  however,  one's  concessions  cease. 

The  necessity  of  the  English  Poor  Law  can  be  traced  distinctly 
back  to  the  crimes  of  rulers  and  their  agents.  I  do  not  say  that  if 
those  four  causes  which  I  have  recounted  had  been  absent,  destitu- 
tion would  never  have  ensued ;  but  I  am  certain  that  it  would  have 
been  more  manageable,  the  police  which  legal  relief  must  in  the 
end  administer  would  have  been  less  harsh,  and  the  relief  itself 
more  gently  given  and  more  gratefully  received.  In  a  vague  way, 
the  poor  know  that  they  have  been  robbed  by  the  great  in  past 
time,  and  are  stinted  now.     Nor  can  any  defence  be  alleged  for  the 


PABOCHIAL  SETTLEMENT.  245 

manner  in  which  the  rate  is  distributed.  The  gain  of  a  Poor  Law, 
that  is,  the  fact  that  relief  is  a  harsh  form  of  insuring  labour 
against  sickness,  old  age,  and  incapacity,  and  therefore  operates 
in  reducing  wages,  is  on  the  side  of  employers.  The  maintenance^ 
of  the  poor  is  laid  on  occupiers.  No  doubt,  the  fact  that  the  small 
occupiers  do  not  employ  labour,  and  therefore  are  not  so  justly 
chargeable  with  its  relief,  accounts  for  the  system  of  a  graduated 
rate,  whicli,  from  the  example  of  Tandridge,  evidently  prevailed  in 
the  early  days  of  the  English  Poor  Laws.  And,  above  afl  things,  it 
is  scandalous  in  the  highest  degree,  that  great  mansions  and  parks 
should  be  now  rated  at  nominal  sums,  and  by  people  who  are 
personally  interested  in  obtaining  exemptions  from  contribution. 
This  gross  unfairness  is  dangerous  as  well  as  dishonest,  for  there 
is  no  little  risk,  when  these  practices  are  not  only  seen,  but  under- 
stood, that  there  will  be  an  effort  after  differential  taxation  in  that 
direction  which  will  invert  the  present  process. 

At  the  Eestoration  the  law  of  parochial  settlement  was  enacted. 
Mischievous  and  selfish  as  the  Act  was,  it  was,  I  make  no  doubt, 
thought  urgent  by  the  heavy  incidence  of  the  poor  rate  in  the 
wealthier  counties,  and  justified  as  a  return,  in  a  sense,  to  the  old 
practice  of  parochial  responsibility.  It  produced  in  the  end,  a 
special  evil,  now  fortunately  historical,  of  the  close  and  open  parish 
— the  former  being  one  in  which  the  whole  parochial  area  belonged 
to  one  person,  who  could  expel  from  its  borders  those  who  might 
be  chargeable,  and  might  therefore  get  his  destitute  labourers 
supported  at  the  charge  of  others ;  and  the  latter,  one  in  which, 
owing  to  a  plurality  of  proprietors,  such  a  policy  was  not  possible. 
This  evil,  remedied  in  part  by  Gilbert's  Act,  passed  more  than  a 
century  ago,  under  which  a*  number  of  urban  parishes  could,  for 
the  purposes  of  relief,  be  included  in  one,  was  cautiously  and  at 
last  completely  altered  under  the  New  Poor  Law.  I  can  well 
remember  the  whimsical  indignation  displayed  by  some  oi  these 
close  proprietors  when  they  were  made  to  take  their  share  in  the 
common  burden.  I  lost  the  friendship  of  one  or  two  among  them 
owing  to  my  zeal  for  this  reform,  and  bore  the  loss  with  patience. 

Just  before  the  Kevolution,  a  return,  preserved  by  Davenant,  was 
made  of  the  poor  rate  in  the  several  English  counties.  I  will  not 
trouble  you  with  the  details.    It  is  sufficient  to  say  that  the  poor 


2iQ-OBIGIN  AND  PBOGEESS  OF  ENGLISH  PAUPEBISM. 

rate  was  much  heavier  in  the  midland,  eastern,  and  southern 
counties,  than  it  was  in  those  north  of  the  Trent,  though  from  the 
returns  of  the  hearth  tax,  an  official  document,  it  appears  that 
the  North  was,  on  the  whole,  as  densely  peopled  as  the  South, 
though  far  more  backward  in  the  conveniences  of  life.  Again  the 
poor  rate,  relatively  speaking,  was  exceedingly  heavy.  For  the 
time  at  which  it  was  taken,  it  was  about  half  the  revenue  of  the 
Crown  in  time  of  peace,  a  proportion  which  no  later  statistics  have 
ever  disclosed,  even  at  the  time  when  it  was  over  eight  millions, 
just  before  the  change  in  the  law.  Again,  the  bonds  of  the 
parochial  settlement  was  made  more  strict  after  the  Eevolution 
than  they  were  before.  The  great  change  which  settled  the  Con- 
stitution brought  no  amendment  to  the  peasant's  lot.  But,  in 
point  of  fact,  the  seventeenth  century  was  one  of  almost  unbroken 
misery  to  the  workman.  At  the  conclusion  of  it,  Gregory  King 
sets  down  all  the  labourers  as  a  class  which  contributes  nothing  to 
the  annual  savings,  and  the  farmer  as  contributing  ne^t  to 
nothing.  During  this  century  the  population  doubled,  and  in.  the 
eighteenth  was  again  doubled.  V 

Arthur  Young  notices  with  dismay  and  anger  that,  though  \he 
wages  of  workmen  had  risen  considerably  at  the  date  of  his  tours 
as  contrasted  with  those  of  a  generation  before,  poor  rates  had 
notably  increased  likewise,  and  he  ascribes  the  disagreeable 
phenomenon  to  the  increase  of  tea  drinking.  It  was  due  to  a  far 
less  recondite  cause,  one,  however,  which  he  would  not  have  liked 
to  admit,  for  it  would  have  been  a  shock  to  a  system  which  he 
greatly  admired.  The  growth  of  the  poor  rate,  despite  the  increase 
of  agricultural  wages  fi'om  about  7s.  6d.  a  week  to  9s.,  taking  the 
harvest  gains  in,  was  due  to  the  enclosures,  the  consequent  exclu- 
sion of  the  poor  from  small  agriculture,  and  to  the  curtailment  of 
bye-industries.  It  was  these  bye-industries  which  kept  rates  low, 
and  even  wages  low  in  the  North.  Besides,  enclosures  went  on  far 
more  rapidly  in  the  South  than  they  did  in  the  North,  as  Young 
indirectly  testifies,  and  as  the  agricultural  returns  of  his  own 
department  prove.  The  poor  became  more  straitened  even  when 
prices  had  not  seriously  risen,  because  they  were  more  and  more 
divorced  from  the  soil.  At  last  the  law  of  Elizabeth  annexing  fouj* 
acres  of  land  to  every  cottage,  and  prohibiting  overcrowding  was 


ARTHUR  YOUNG'S  COMMENTS.  247 

repealed.  It  was  a  great  boon  to  the  peasant,  but  it  was  a  hind- 
rance to  enclosures.     He  has  not  yet  recovered  it. 

The  first  half  of  the  eighteenth  century,  owing  to  the  prevalence 
and  success  of  the  new  agriculture  was  one  of  great  plenty,  high 
profits,  low  prices,  and  increasing  wages.  I  have  no  evidence  on 
the  subject  of  poor  rates,  but  I  conclude  from  Young  s  contrasts, 
that  they  were  stationary  or  declining.  The  next  quarter  was  not 
unprosperous ;  the  last  was  one  of  high  prices,  low  wages,  and 
unparalleled  suffering.  The  distresses  of  the  poor  attracted 
attention,  and  Sir  Frederic  Eden  essayed  their  history.  For  his 
own  time  it  is  valuable,  for  the  near  part  useful,  for  the  remoter 
past  his  work  is  worthless,  for  he  had  no  information,  and  he  does 
not  appear  even  to  have  studied  the  Statute  Book.  Eents  rose 
rapidly,  and  the  farmers  began  to  grumble  at  the  justices'  assess- 
ments as  too  generous  to  the  poor.  Acts  of  Parliament  were 
passed,  restraining  the  use  of  barley  in  beer,  restraining  the 
excessive  bolting  of  the  bran  from  wheat,  the  king  had  bran 
loaves  served  on  his  table,  and  the  princesses  wondered  that  people 
would  starve,  while  cake  could  be  got.  "  I  would  sooner,"  said  one 
of  these  innocent  creatures,  **  eat  bread  and  cheese  than  starve." 

The  magistrates  of  Berkshire,  appalled  at  the  magnitude  of  the 
calamity,  and  at  their  wits'  end  to  devise  a  remedy,  at  the  close  of 
the  century  devised  a  new  mode  of  relief,  which,  from  the  place 
of  their  meeting,  got  the  name  of  the  Speenbamland  Act.  They 
were  encouraged  in  their  course  by  an  interpretation  which  they  put 
on  two  Acts  of  ParUament,  9  Geo.  I.  cap.  7,  and  22  Geo.  III. 
cap.  83.  They  assumed  a  certain  sum,  according  to  the  price  of 
wheat,  which  would,  they  conceived,  support  a  man,  his  wife  and 
one  child,  and  that  they  declared  to  be  the  minimum  earnings. 
In  the  case  of  a  man  whose  family  was  more  numerous,  they 
despaired  of  obtaining  increased  wages  from  the  employer,  so  they 
added  the  necessary  sum  from  the  rates.  This  was  known  as  the 
allowance  system,  and  was  greatly  condemned  by  the  more  zealous 
Malthusians  as  a  premium  on  population,  or  as  they  sometimes 
said,  incontinence.  No  one  was  struck  at  the  outrageous  injustice 
of  making  those  occupiers  who  did  not  employ  labour  pay  the 
wages,  often  half  the  wages,  of  those  who  did  employ  labour. 
Shortly  after  its   adoption,   Mr.  Whitbread  tried  to  give  legal 


248  OBIGIN  AND  PBOGBESS  OF  ENGLISH  PAUPEBISM. 

authority  to  the  practice,  but  it  does  not  seem  that  it  was  ever 
invested  with  this  dignity.  It  prevailed  till  the  new  Poor  Law 
was  passed,  and  so  mechanical  was  it,  that  I  remember  two  cases  in 
my  own  native  place  of  provident  and  furtive  day  labourers,  who 
saved  up  the  price  of  a  small  farm  from  their  allowances. 

At  last  the  system  became  intolerable.  The  rates  in  the  open 
parishes  were  eating  up  the  whole  rent,  and  the  landowner's  device 
was  rapidly  becoming  the  landowner's  ruin.  A  new  system  was 
tried  by  Mr.  NichoUs  and  Mr.  Lowe,  at  Bingham  and  Southwell, 
and  its  success  suggested  the  new  Poor  Law,  which  the  Whigs, 
guided  by  the  metaphysical  economists,  carried.  It  was  necessary, 
but  the  process  of  change  was  inverted.  It  should  have  followed, 
not  preceded,  the  reform  or  abolition  of  the  Corn  Laws.  But  the 
Whigs  thought  that  the  landed  interest  would  be  ruined  if  the 
people  had  cheap  food,  and  naturally  preferred  the  former  to  the 
latter  interest.  Curiously  enough,  Mr.  Villiers'  return  of  wages, 
some  few  years  afterwards,  when  he  was  at  the  Poor  Law  Board, 
showed  that  wages  in  the  aggregate  had  risen  rather  more  than 
poor  rates  had  decreased.  By  this  time  the  right  persons  were 
paying  them. 

The  apparently  selfish  policy  of  the  party  which  carried  the  new 
Poor  Law  led  to  the  establishment  of  Chartism.  It  was  of  no 
little  service  in  its  early  days  to  the  Conservative  party  in  the 
North,  and  even  in  its  decadence  it  is  of  service  to  that  party  now. 
It  coupled  political  reforms  with  a  socialist  or  quasi-socialist  eco- 
nomical platform.  Some  of  these  economical  purposes  were  good, 
as,  for  example,  the  Factory  Acts,  and  there  is  little  doubt  that  this 
beneficent  change  was  greatly  aided  by  the  working  men  who 
followed  Oastler  and  O'Connor.  These  people,  however,  were  so 
unintelligent  that  they  resisted  the  repeal  of  the  Corn  Laws,  on  the 
plea  that  free  trade  would  lower  wages.  Even  now,  it  is  said  that 
not  a  few  of  them  believe  that  a  period  of  high  prices,  created 
artificially,  would  heighten  them.  You  at  least  are  not  likely  to  fall 
into  this  delusion,  for  the  whole  consensus  of  facts  proves  the 
reverse. 


xn. 

HISTOEICAL  EFFECTS  OF  HIGH  AND  LOW  PEICES. 

Gregory  King's  law — The  foundation  of  the  laws  regulating  prices — 
Causes  which  depress  and  raise  prices — The  scarcity  or  plenty  of 
gold  and  silver — Lessened  cost  of  production — Lessened  cost  of 
freight — The  produce  of  'silver  in  England — Foreign  silver  and 
gold  procured  by  trade — The  effect  of  plagues  on  prices — The 
younger  son  and  the  civil  war — The  literature  of  the  seventeenth 
century — ShaJcspere  and  Dry  den — The  inventions  of  the  eighteenth 
century — The  authors  of  the  new  agriculture,  and  Arthur  Young — 
The  services  of  Sir  John  Sinclair  to  Scottish  agriculture — High 
prices  cannot  of  themselves  recover  high  rents. 

When  I  was  drawing  up  the  list  of  lectures  which  I  purposed  to 
give  in  the  present  term,  I  very  much  hesitated  before  I  concluded 
to  put  down  that  which  forms  my  subject  to-day.  The  range  of  the 
subject  is  very  great,  the  facts  are  very  copious  and  very  intricate, 
the  subject  from  the  historical  point  of  view  is  as  yet  so  utterly 
unknown,  and  the  evidence  is  so  remote  and  so  near,  that  I  might 
well  despair  of  giving  you  a  clear  and  connected  outline  of  the 
elements  from  which  to  make  economical  inductions  and  historical 
interpretations.  But,  on  the  other  hand,  the  topic  is  of  such  great 
and  general  importance,  the  issues  which  it  raises  are  of  such  pro- 
found significance,  the  interests  of  which  it  treats  are  so  varied  and 
so  vital,  and  the  future  which  it  seeks  to  penetrate  by  the  evidence 
of  the  past  is  so  immediate,  so  full  of  menace  and  withal  so 
obscure,  that  if  I  am  able  to  throw  any  light  on  the  situation,  I 
should  be  lacking  in  that  courage  which  one  who  has  special 
knowledge  ought  to  show,  if  he  thiuks  he  can  elucidate  a  grave 


I. 


250  EISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  PBICE8. 

social  problem.  As  on  other  occasions,  I  shall  attempt,  by  way  of 
preface  to  what  I  have  to  say,  to  state  concisely  and  as  clearly  as  I 
can  what  are  the  principles  on  which  high  and  low  prices  depend, 
or,  in  other  words,  the  laws  and  causes  which  induce  them,  and  in 
what  manner  these  causes  which  should  be  dominant  are  modified 
01  obscured  by  other  causes  and  conditions,  the  true  force  or 
influence  of  which  must  be,  if  possible,  weighed  and  distributed. 
And  here  I  may  observe :  (1)  That  there  is  no  part  of  political 
economy  in  which  the  metaphysical  or  psychological  method  which 
you  get  up  in  your  text-books  is  more  misleading  and  delusive 
than  it  is  on  this  subject,  where  the  only  safe  course  is  to  collect 
and  estimate  facts  ;  and  (2)  that  variations  of  high  and  low  prices, 
which  a  century  or  more  ago  would  have  excited  little  attention, 
and  caused  little  alarm,  in  our  day,  when  production  and  trade  are 
so  sensitive  and  so  complicated,  rouse  the  gravest  apprehensions 
and  exercise  the  attention  of  the  most  laborious  and  acute  investi- 
gators into  economical  phenomena  and  economical  agencies. 

Now  there  is  one  law  of  prices  which  you  must  know  and  under- 
stand before  you  can  make  the  least  progress  in  interpreting  the 
simplest  problem.  It  is  known  to  some  economists,  I  do  not  say 
all,  for  it  is  most  unaccountably  neglected  or  obscured  in  most 
treatises  on  the  subject,  as  Gregory  King's  law.  Gregory  King 
was  Lancaster  Herald  in  the  latter  part  of  the  seventeenth  century. 
Struck,  as  I  do  not  doubt,  with  the  extraordinary  fluctuations  of 
price,  particularly  in  the  price  of  wheat,  which  characterized  the 
seventeenth  century,  and  being  a  man  of  really  statistical  mind — 
that  is,  one  able  not  only  to  collect  figures,  but  to  interpret  related 
figures— he  stated  it  in  this  form,  and  you  will  remember  that  I 
have  often  referred  to  it: — 

"  We  take  it,  a  defect  in  the  harvest  may  raise  the  price  of  corn 
in  the  following  proportions  : — 

Defect.  Above  the  common  rate. 

1  tenth  raises  the  price  3  tenths 

2  tenths      „  „        8  tenths 
S  tenths      „  „       16  tenths 

4  tenths      „  „      28  tenths 

5  tenths      ,,  „      45  tenths.*" 


LAWS  BEOULATING  PEICES,  251 

and  from  this  King  draws  some  highly  practical  conclusions  from 
the  free  trade  practices  of  the  Dutch.  It  will  be  observed  that 
King  merely  takes  the  price  of  corn,  and  that  though  he  gives  the 
proportion  in  an  arithmetical  form,  he  intends  to  imply  no  more 
than  a  principle,  which  experience  may  modify.  Let  me  try  to 
draw  out  in  the  form  of  an  economical  rule  or  rules,  the  important 
canon  of  prices  which  was  suggested  two  centuries  ago,  as  I  have 
seen  it  verified  in  the  long  research  which  I  have  given  to  the 
subject. 

1.  The  price  of  any  article  in  demand,  but  at  present  in  defect, 
rises  in  price  by  a  different  ratio  from  that  indicated  by  the  ascer- 
tained amount  of  the  deficiency ;  and  e  comerso,  the  price  of  any 
article  in  demand,  but  at  present  in  excess,  falls  in  price  by  a 
different  ratio  from  that  indicated  by  the  ascertained  amount  of  the 
over-supply.  By  the  expression  **  ascertained  amount,"  I  do  not 
intend  that  the  quantity  shall  be  exactly  measured.  It  is  sufficient 
for  the  illustration  of  the  first  rule  that  it  should  be  a  sufficiently 
apprehended  fact. 

2.  The  operation  of  the  above  law  is  always  most  doiiiinant  in 
articles  of  prime  necessity,  in  which  no  notable  economy  can  be 
made  without  suffering  on  the  part  of  the  people  when  supply  is 
short,  and  no  notable  increase  of  consumption  can  be  expected  when 
the  quantity  is  in  excess  of  supply.  If  the  article  is  relatively 
perishable,  the  phenomena  increase  in  intensity  on  either  side. 
This  law  or  rule  is  not  unlike  Mr.  Mill's  principal  law  of  values, 
but  is  more  comprehensive. 

3.  If  in  the  scarcity  or  excessive  plenty  which  prevails,  as  the 
case  may  be,  there  are  several  kinds  of  the  same  article,  which 
ordinarily  stand  in  a  certain  ratio  to  each  other,  and  can  be  used 
interchangeably,  the  rise  of  price  is  greatest,  in  the  event  of 
a  scarcity,  in  what  has  been  heretofore  the  cheapest  form,  and 
conversely  in  a  time  of  oversupply  the  greatest  fall  is  in  what  has 
hitherto  been  the  dearest.  This  rule  will  require  a  little  explana- 
tion. Roughly  speakmg,  under  ordinary  circumstances  wheat, 
barley,  and  oats  stand  in  the  ratio  of  100,  78,  and  50.  Now  in 
times  of  scarcity  78  and  50  will  rise  more  than  100  dx)es,  and  if 
there  be  a  fall  in  prices  owing  to  excessive  supply  100  will  fall  more 
than  78  and  50  do.     This  rule  is  of  the  greatest  importance  in 


^b'Z  HISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  PBICES. 

practice,  and  in  a  rough  manner  is  sean,  though  none  too  clearly, 
^  by  practical  men  of  business. 

4.  If  the  articles  in  question  are  more  or  less  of  voluntary  or 
optional  demand,  and  the  supply  be  in  excess,  prices  tend  to  fall  to 
money  values  which  come  very  near  the  margin  indicated  by  the 
present  cost  of  production ;  but  if  the  demand  be  in  excess,  profits 
rise  considerably,  and  production  and  trade  are  active.  I  state  this 
law,  which  is  accurate  enough  when  other  prices  are  nominal,  but 
is  apt  to  be  powerfully  affected  under  the  pressure  of  such  excep- 
tional circumstances  as  I  shall  have  to  refer  to  hereafter.  If  the 
use  is  entirely  voluntary  the  phenomena  are  intensified;  if  the 
option  is  exercised  in  the  direction  of  a  practicable  economy  of 
use,  they  are  less  powerfully  exhibited. 

6.  High  prices  in  articles  of  necessary  use  consequent  upon 
scarcity,  natural  or  artificial,  diminish  the  purchasing  power  of 
wages,  and  do  not  increase  the  amount  of  employment.  High 
prices  consequent  on  demand  in  voluntary  articles  which  can  be 
increased  indefinitely  increase  profits  and  increase  wages.  Low 
prices  in  articles  of  voluntary  use  do  not,  especially  when  labour 
or  employment  is  greatly  distributed,  lower  wages,  so  long  as  the 
producer  does  not  or  cannot  diminish  the  output.  If  the  demand 
for  labour  is  urgent,  and  the  supply  is  scarce.  King's  law  applies  to 
labour  as  fully  as  to  any  commodity.  The  working  of  this  law  is 
exceedingly  obscure,  but  very  real;  but  I  hope  to  be  able  to  illiis- 
trate  it  clearly  in  the  course  of  this  lecture,  at  least  in  its  most 
salient  points.  For  the  moment,  take  the  law  in  its  briefest  form. 
High  prices  do  not  make  high  wages. 

Now  these  are  the  principal,  I  will  not  say  the  only,  but  the 
most  practical  of  the  laws,  rules,  or  canons,  which  may  be  deduced 
from  King's  statement,  which  in  the  form  of  a  question,  is,  accord- 
ing to  his  figures,  as  follows  :  Why  is  it  that  a  deficiency  of  food,  to 
the  extent  of  one  half  an  average  supply,  raises  the  price  of  the 
actual  supply  nine  times  over  the  average  price  ?  I  will  candidly 
say  that  I  have  never  recorded  such  a  rise ;  the  highest  I  have 
noted  was  in  the  year  1315,  five  times  for  wheat.  But  as  I  have 
already  stated,  Gregory  King's  proportion,  thou,ij;h  undoubtedly 
Bound  in  principle,  is  hypothetical  in  form.  I  am  indebted  to  King 
for  the  principle  of  the  general  law  governing  prices ;  the  canons 


CAUSES  WHICH  DEPBES8  OB  BAISE  PBICE8.        253 

which  I  have  given  you  are  inductions  from  my  own  researches, 
inductions  which  I  intend  to  the  best  of  my  power  to  illustrate. 

But  I  must  now  proceed  to  the  next  part  of  my  economical 
inquiry.  Three  causes,  apart  from  those  laws  which  I  have  already 
given  tend  to  depress  or  raise  prices  ;  one  in  the  course  of  econo- 
mical history  to  raise  them,  two  others  to  depress  them.  The 
depressing  causes  have  never  overtaken  the  exalting  cause,  except 
in  some  significant  cases,  and  every  effort,  as  I  shall  try  to  show, 
is  made  to  prevent  so  entire  a  change  in  relative  values  as  such  a 
result  would  effect.  If  it  did  take  place  universally,  it  is  difficult 
to  see  how  society  would  accommodate  itself  to  the  obligations 
which  it  has  created  or  has  suffered  to  be  created  on  its  behalf.  It 
is  a  minor,  but  only  a  minor  matter,  that  it  would  effect  an  entire 
social  revolution,  because  it  would  seriously  affect  all  who  have 
depreciable  property,  i.e.y  working  capital  and  land,  and  as  inevit- 
ably better  those  who  have  that  property  in  which  a  fixed  rate  of 
interest  is  paid  for  advances,  the  fund  and  debenture  holder,  i.e., 
the  man  to  whom  the  earnings  of  the  nation,  and  the  earnings  of 
industrial  companies,  are  pledged  at  a  given  rate  of  interest. 

The  three  causes  are  (1)  the  plenty  and  scarcity  of  gold  and 
silver  ;  for  the  last  800  years,  the  elevating  cause  of  prices.  The 
two  others  are  (2)  diminished  cost  of  production ;  (3)  diminished 
cost  of  freight.  These  causes  are  dominant,  but  I  must  warn  you 
that  there  are  other  agencies  behind  them,  which  I  shall  have  to 
expound,  which  are  also  depressing  causes  of  prices.  If  we  are 
able  to  grasp  the  five  general  laws  of  prices  which  I  have  given 
above,  which  you  will  see  are  exponents  of  immediate  phenomena, 
and  the  three  causes  which  are  operative  over  permanent,  or  at 
least  continuous,  phenomena,  we  shall  be  on  the  way  to  interpret 
the  facts,  past  and  present,  which  I  have  to  lay  before  you.  You 
will  remember,  too,  that  the  laws  and  causes  are  disparate,  but 
co-ordinate.  The  laws  which  I  have  quoted,  in  so  far  as  they  have 
had  materials  to  work  on  and  opportunity  for  activity,  have  affected 
prices,  or  money  values,  and,  in  the  absence  of  mon6y,  exchange 
values  from  the  days  of  the  Pharaohs  to  the  days  of  the  Coburgs. 
But  the  causes  have  been  especially  dominant  during  the  last  two 
centuries.  Society  may,  by  an  accession  of  barbarism,  entirely  lose 
the  fine  arts.     But  if  the  civilization  of  antiquity  had  been  equally 


254  HI8T0BICAL  EFFECTS  OF  HIGH  AND  LOW  PBICE8. 

interested  in  tlie  industrial  arts,  it  is  doubtful  whether  civilization 
would  have  been  lost,  as  it  was  lost,  for  at  least  twelve  centuries. 
The  protection  which  the  industrial  arts  give  society  is  so  great  that 
all  the  savages  collected  by  Jinghis  Khan,  Tamerlane,  and  the 
Osmanli  Turks  together  would  have  been  annihilated  by  two  or  three 
squadrons  of  modern  infantry  and  a  modern  park  of  artillery.  But 
the  civilization  of  antiquity  accepted  the  fatal  custom  of  slavery ; 
and  the  process  of  invention,  of  adapting  natural  laws  to  the 
economy  of  human  labour  in  production,  never  made  progress  for 
lack  of  motive. 

When  I  speak  of  ihe  plenty  and  scarcity  of  gold  and  silver,  I  am 
referring  to  the  case  of  either  of  these  metals  being  legal  tender  to 
any  amount,  that  is,  compulsorily  acceptable  in  liquidation  of  con- 
tracts, to  the  exclusion  of  the  other ;  or,  which  is  an  exceedingly 
rare  case,  adjusted  in  value  to  each  other  by  so  exact  a  proportion, 
that  the  recipient  of  the  sum  is  indifferent  whether  he  receives  the 
one  or  the  other.  Now  this  equivalence  may  be  discovered  and 
affirmed  as  a  commercial  fact,  or  it, may  be  to  some  extent  the 
creation  of  law.  In  order  to  make  this  clear,  I  will  illustrate  it 
from  the  annals  of  the  EngHsh  currency. 

In  1257,  it  is  said  that  Henry  IIL  issued  a  gold  currency  in  the 
proportion  of  10  to  1,  and  that  on  the  remonstrance  of  the 
London  citizens,  he  took  it  back  at  a  discount  of  2^  per  cent.,  or  at 
9f  to  1.  In  12C2,  ho  bought  gold  for  making  into  plate  at  9i  to  1. 
Thirty  years  later  Edward,  his  son,  bought  gold  ingots  at  12i  to  1, 
the  object  being  to  decorate  the  crosses  which  he  set  up  in  memory 
of  his  wife  Eleanor  of  Castile.  During  the  fourteenth,  fifteenth, 
and  sixteenth  centuries,  when  a  gold  coinage  was  circulating  in 
England,  the  ratio  varied  from  about  10^  to  llf.  In  the 
seventeenth  century  it  was  about  15  to  1,  and  the  ratio  was 
liable  to  considerable  fluctuations.  In  the  eighteenth  it  was 
overvalued,  and  as  a  consequence  silver,  the  undervalued  cur- 
rency, disappeared.  The  ratio  was  altered,  and  a  limit  put  to 
the  legal  tender  of  silver.  In  1819  the  market  rate  was  15^ 
to  1,  at  which  it  was  undervalued,  and  gold  disappeared  from 
France.  To  meet  the  difficulty,  the  Latin  Union  was  formed, 
and  the  issue  was  regulated.  But  the  Californian  and  Australian 
gold  discoveries  led  to  the  overvaluation  of  gold,  and  silver  began 


THE  SCAIiCITY  OB  PLENTY  OF  GOLD  AND  8ILVEE.  256 

to  disappear.  Eecently  silver  has  been  demonetised,  except  for 
cliauge  in  Germany,  Italy,  the  United  States,  and  France,  the  last 
two  practically,  though  not  theoretically.  The  present  ratio  is 
nearly  2 2 1-  to  1. 

Tiiese  alterations  of  proportion  are  wholly  due  to  the  use  of 
gold  as  currency.  The  rise  in  thu'ty  years  from  94  to  12|  was 
due,  as  I  pointed  out  long  ago,  to  the  adoption  of  a  gold  cur- 
rency by  the  Italian  cities.  But  out  of  Italy  a  gold  currency  was 
unimportant  up  to  the  seventeenth  century,  when  the  American 
supplies  came.  The  present  fall  is  due  to  the  cessation  of  silver 
coinages.  If  Austria  and  Eussia  were  to  retire  their  forced  paper 
currencies,  and  adopt  a  legal  tender  silver  currency,  and  if  China 
were  to  issue  a  silver  currency,  the  price  of  silver  would  rise, 
if  not  to  its  old  proportion,  to  something  very  much  nearer  it 
than  it  is  likely  to  be  unless  such  expedients  be  adopted.  If  you 
leave  off  using  any  article  hitherto  in  demand,  either  by  finding  a 
cheaper  substitute  for  it,  or  by  discontinuing  it  in  whole  or  part, 
my  first  law  of  prices  at  once  applies.  Now  the  Governments  of 
Germany  and  Italy  adopted  a  dearer  substitute  for  silver,  and  lost 
a  great  deal  by  the  operation;  the  former  a  considerable  part  of  the 
indemnity  which  it  extorted  from  France  after  the  war  of  1870. 

The  other  two  diminishing  causes  of  prices  were  very  slow  in 
coming  into  operation.  There  is  very  httle  evidence  that  in  any 
department  of  human  industry  improvements  in  the  process  of  pro- 
duction diminishing  cost  are  traceable;  for  centuries,  abundant  evi- 
dence shows  that  no  such  improvements  were  made.  I  will  mention 
two  instances  in  which  distinct  progress  was  made  and  is  traceable 
in  diminishing  prices.  These,  the  most  marked  examples  which  I 
have  seen,  are  paper  and  glass.  There  is  not,  I  believe,  any  in- 
formation in  existence  as  to  what  improvements  were  made,  and 
where  they  were  made.  But  when  prices  begin  to  rise,  the  money 
value  of  these  two  articles  is  either  stationary  or  sinks.  It  is  certain 
that  the  demand  did  not  fall  off,  and  when  prices  were  rising  all 
round,  the  fact  that  any  alteration  m  the  price  of  these  two  articles 
was  in  the  direction  of  cheapness,  is  a  proof  which  no  direct  testi- 
mony would  strengthen,  that  the  phenomenon  is  due  to  diminished 
cost  of  production. 

Diminished  cost  is  exhibited  in  several  ways.    1.  It  may  be  that 


256  HISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  PBICES. 

less  time  is  required  in  order  to  bring  the  thing  into  a  merchant- 
able condition,  for  the  saving  of  time  is  a  saving  of  interest,  risk, 
and  profit.  Thus  in  the  breeding  and  management  of  animals,  the 
agriculturist  whose  skill  shortens  the  period  to  one-third  in  which 
stock  is  brought  to  market,  gains  at  first  the  whole  profit  of  his 
economy,  till  the  skill  being  diffused  among  all  farmers,  his  advan- 
tage is  absorbed  in  rent.  2.  It  may  be  that  what  has  hitherto 
been  intractable  by  any  known  laws  of  nature  is  found  to  yield  on 
the  discovery  of  a  new  law  to  which  it  is  amenable.  Such  was  the 
case  with  those  iron  ores  which  contained  phosphorus,  arsenic, 
and  sulphur,  and  were  of  no  economical  value  till  the  discovery  of 
Bessemer's  process.  In  general  nothing  has  been  more  noteworthy 
than  the  economy  of  what  has  been  conceived  up  to  recent  periods 
to  be  mere  waste.  3.  It  may  be  that  the  economy  is  in  the  process. 
At  present,  by  the  improvement  of  furnaces,  a  ton,  say  of  pig  iron, 
requires  not  more  than  a  third  of  the  coal  or  coke  it  required 
twenty  years  ago  in  order  to  make  it  merchantable.  4.  It  may  be 
in  the  manipulation  of  the  product.  It  is  not  easy  to  define  raw 
materials.  Under  certain  circumstances,  what  seem  to  be  finished 
goods  are  raw  materials  for  another  product,  if  they  are  required 
in  order  to  achieve  a  further  economic  result.  Clothing  in  a  wax- 
work exhibition  are  raw  materials  ;  to  most  of  us  they  are  finished 
goods  which  have  a  final  and  no  ulterior  economic  use.  But  the 
processes  by  which  products  are  handled  for  one  stage  or  the  other 
of  a  merchantable  article,  are  the  subject  of  incessant  improvement 
and  modification.  Now  in  all  these  four  forms  of  diminished  cost, 
and  I  am  far  from  having  exhausted  them,  no  appreciable  develop- 
ment has  been  or  could  be  traceable  till  comparatively  recent 
times. 

Improvement  and  economy  in  the  cost  of  freight  is  also  a  matter 
of  very  recent  experience.  When,  after  the  year  1600,  the  English 
East  India  Company  was  formed,  it  took  more  than  two  years  to 
double  the  Cape,  to  collect  a  cargo  of  goods,  and  to  return.  At 
the  present  time  the  journey  backwards  and  forwards  is  achieved 
in  two  months.  But  it  is  not  only  accomplished  in  one-twelfth  the 
time,  but  with  much  greater  safety,  and  with  less  than  a  twelfth  of 
the  relative  cost.  Means  too  have  been  invented  by  which  the 
market  may  be  foreseen  and  anticipated,  balances  due  from  either 


LESSENED  COST  OF  FBEIGBT.  257 

side,  constantly  in  old  times  transmitted  at  great  risk  and  cost,  are 
written  off  against  each  other  and  by  monetary  communications. 
Navigation,  once  a  knack,  is  now  an  art;  the  astronomer,  the 
meteorologist,  the  physicist,  have  been  pressed  into  the  service  of 
trade,  and  the  man  who  at  first  sight  is  merely  a  student  of  know- 
ledge for  the  sake  of  it,  is  constantly  discovering  and  arranging 
facts,  which  the  economist  who  interprets  results,  instead  of  being 
engaged  in  barren  speculations,  discovers  to  have  played  their 
part  in  reducing  the  cost  of  production  and  exchange.  For,  as  I 
have  said  more  than  once,  though  the  power  of  man  to  appropriate 
the  forces  of  nature  is  necessarily  limited,  no  one  knows,  and  no 
one  ever  will  know,  what  those  Hmits  are. 

Now  I  must  admit  that  much  of  what  I  have  just  now  said  is 
part  of  the  commonplaces  of  industrial  history,  of  which  you  may 
read  much,  and  that  with  gush,  in  the  pages  of  Mr.  Smiles  and 
such  people.  But  though  I  do  not  purpose  to  trouble  you  with  the 
statistics  of  what  I  may  call  the  saving  of  waste  and  friction,  it  will 
be  clear  that  what  I  have  dwelt  on  has  its  past  in  that  machinery 
of  production  and  trade,  the  concrete  illustration  of  which  is  high 
and  low  prices,  the  interpretation  of  which  is  the  object  I  have 
before  me. 

When  the  facts  come  before  them  and  are  examined  and  ad- 
mitted, the  first  impulse,  even  in  those  who  should  be  better  in- 
formed, is  to  assign  high  and  low  prices  to  the  excess  and  defect 
of  the  precious  metals.  In  an  age  when  no  substitutes  for  money 
had  been  discovered,  and  no  efficiency  of  the  precious  metals  in  the 
operation  of  exchange  had  been  dreamed  of,  the  plenty  or  scarcity 
of  money  had  a  far  more  direct  effect  on  prices  than  it  has  in  more 
recent  times.  There  is  no  doubt  that  one  rise  in  prices,  for 
example,  was  effected  between  1541  and  1582,  and  another  between 
1583  and  1642,  and  a  third  of  far  smaller  significance  between  1643 
and  1702.  But  it  is  as  certain  that  the  first  modification  was  due 
to  the  currency  and  certain  peculiar  facts  connected  with  it ;  the 
second  was  due  to  the  influx  of  the  precious  metals,  and,  speaking 
generally,  to  that  alone ;  while  the  third  was  of  a  much  more  com- 
plicated character,  and  can  be  referred  only  doubtfully  and  shghtly, 
to  currency  influences  at  all. 

A  country  which  does  not  produce  the  precious  metals  itself 

18 


258  HISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  PBICE8, 

procures  them  by  the  operations  of  foreign  trade.  Now  England, 
till  the  rise  in  prices  at  the  beginning  of  the  seventeenth  century, 
when  it  is  unquestionable  that  the  supplies  came  from  the  New 
World,  supplied  itself  with  silver,  as  I  told  you  in  a  previous  lecture ; 
for  silver  is  rarely  found  in  Europe,  except  in  conjunction  with 
lead,  and  the  English  did  not,  if  we  can  trust  the  accounts  given 
of  its  trade,  import  lead  at  all,  but,  on  the  contrary,  was  a  source 
of  supply  to  the  west  of  Europe.  From  this  lead  it  extracted  its 
silver,  and  I  have  no  doubt  whatever  that  from  this  country 
Western  Europe,  and  in  particular  France  and  the  Low  Countries, 
procured  the  main  of  their  supplies.  The  superficial  gold  suppUes 
of  the  British  Islands,  large  probably  in  pre-historic  times,  espe- 
cially in  Ireland,  where  the  use  of  gold  ornaments  was  very  general, 
as  the  collections  of  the  Eoyal  Irish  Academy  show,  were  long  ex- 
hausted, although  Adam  de  Moleyns  says  that  Ireland  still  produced 
gold  of  the  finest  quality.  The  circulation  of  gold  was,  however, 
trivial,  and  remained  trivial  tiU  the  seventeenth  century,  all  Euro- 
pean countries  using  a  silver  currency.  Some  even  used  a  billon 
or  mixed  metal  local  currency,  an  abomination  which  circulated  up 
to  fifteen  years  ago  in  Germany  and  Switzerland.  The  gold  cur- 
rencies of  Italy  in  the  thirteenth  and  fourteenth  centuries  were 
chiefly,  if  not  entirely,  drawn  from  Byzantine  reserves. 

I  purposely,  at  this  stage,  entirely  ignore  the  effect  of  paper  cur- 
rencies :  such  as  existed,  at  the  epoch  when  the  cheapness  of  money 
affected  prices,  were  local,  and  were  limited  to  the  operations  of  mer- 
chants. It  was  not  till  after  the  Eestoration  that  the  circulation 
of  goldsmiths'  notes  was  general,  and  then  was  only  general  in 
London.  The  denomination  of  the  notes  was  high,  and  remained 
high.  So  little  profit,  indeed,  was  derived  from  them  by  private 
bankers,  the  successors  of  the  London  goldsmiths,  that  at  a  doubtfnl 
period  in  the  middle  of  the  eighteenth  century  these  bankers  retired 
their  notes,  as,  in  effect,  since  1844,  private  bankers  who  retained  the 
right  of  issue  have  nearly  retired  theirs  also.  To  all  practical  pur- 
poses, then,  the  circulation  of  the  public  was,  and  remained,  metallic, 
from  the  earliest  date  of  recorded  economical  history  down  to  the 
great  event  which  I  referred  to  in  an  earlier  lecture,  the  suspension 
of  cash  payments,  when  a  perfectly  new  departure  was  made. 

England,  then,  from  early  times  down  to  the  beginning  of  the 


THE  PBODUCE  OF  SILVEE  IN  ENGLAND.  259 

seventeenth  century,  could  and  did  rely  on  its  own  resources  for  its 
own  supplies  of  currency,  and  though,  as  I  have  stated,  a  restraint 
was  put  on  the  exportation  of  the  precious  metals,  it  is  obvious 
that  if  it  were  the  interests  of  the  merchant  to  export,  there  was 
no  machinery  in  existence  which  could  hinder  him.  Now  up  to 
the  incidence  of  the  Great  Plague  the  average  price  of  lead  for  the 
previous  ninety  years  was  53s.  3d.  the  fother,  after  the  plague,  for  fifty 
years,  it  was  1283.  4d.  But  during  the  next  one  hundred  and  forty 
years  it  is  73s.  9d.,  and  the  price  is  declining  during  the  early  part  of 
the  sixteenth  century.  Now  cheap  lead  implies  a  more  abundanb 
supply  of  silver,  and,  of  course,  if  a  foreign  market  was  ready  to 
take  off  an  excess  of  produce,  it  would  do  so  without  prices  being 
heightened,  as  they  would  have  been  heightened  had  the  silver,  as 
the  law  intended,  found  no  exit  from  England.  There  was,  beyond 
question  then,  for  the  evidence  of  prices  is  conclusive  on  the  sub- 
ject, a  regular  outflow  of  English  silver  into  Western  Europe,  till 
the  new  source  of  supply  from  Mexico  and  Peru  made  the  cost  of 
English  silver  too  considerable  for  its  profitable  extraction,  at  least 
for  a  time. 

Now  the  value  of  the  precious  metals  at  the  place  of  their  origin 
depends  on  the  cost  of  production,  just  as  the  value  of  everything 
else  does.  It  is  presumed  that  people  will  not  undergo  the  severe 
and  dangerous  work  of  mining  unless  they  get  the  compensation 
which  is  anticipated  by  all  industrial  agents.  But  here  we  should 
remember  that  another  principle  comes  in.  Those  callmgsin  which 
exceptional  profits  are  a  characteristic,  i.e.,  profits  depend  greatly 
on  chance,  are  exceptionally  attractive.  The  more  tickets,  says 
Adam  Smith,  a  man  takes  in  a  lottery,  the  more  certain  is  he  to 
lose.  But  the  fact  that  one  man  has  drawn  a  great  prize  in  a  lottery 
attracts  many  who  certainly  will  not;  for,  says  the  same  acute 
author,  people  always  think  their  own  good  fortune  and  their  own 
abilities  at  least  equal  to  that  of  their  neighbours.  A  longer  ex- 
perience of  mankind  than  most  of  you  have  has  convinced  me  that 
Smith's  observation  is  sagacious  and  accurate,  and  you  need  not 
think  yourselves  cynical  if  you  hold  the  same  opinion.  Now  this 
gambling  spirit  operates  powerfully  in  mining. 

But  in  countries  which  do  not  produce  the  precious  metals,  the 
value  depends  on  the  cost  of  acquisition,  i.e.,  on  the  cost  of  th^ 


260  HISTOBICAL  EFFECTS  OF  EIGH  AND  LOW  PEICES. 

commodity  against  which  they  are  exchanged.  Of  course  in  no 
exchange  can  you  separate  the  cost  of  acquisition  from  the  cost  of 
production,  but  in  the  exchange  of  goods  against  gold  and  silver 
the  cost  of  acquisition  is  more  obvious  than  that  of  production. 
Now  the  difference  between  the  cost  at  which  the  article  is  pro- 
duced may  be  low,  and  its  exchange  value  may  be  high.  The 
cost  at  which  Philip  II.  procured  the  precious  metals  in  his  Plate 
fleet  was  low,  for  they  were  procured  by  a  tax  on  the  mine  adven- 
turers, who  were  permitted  to  wear  out  the  native  population  by 
compulsory  labour.  In  so  far  as  the  Dutch  and  English  appro- 
priated these  treasures  by  privateering,  the  cost  of  acquisition  was 
comparatively  low.  But  they  were  chiefly  exchanged  against  goods 
purchased  or  procured  by  the  Amsterdam  merchants  in  Cadiz  and 
Seville.  Except,  then,  in  so  far  as  the  English  traded  with 
Holland  or  Spain,  no  portion  of  the  treasures  of  the  New  World 
would  have  entered  into  English  currencies.  Still,  from  the 
beginning  of  the  seventeenth  century,  the  English  have  imported 
gold  and  silver  bullion,  and  have  done  it  by  their  trade.  The 
home  supply  of  silver  became  insignificant.  Now  it  is  plain  that 
the  country  which  procures  the  precious  metals  with  the  greatest 
ease  can  always  obtain  them  in  the  greatest  plenty,  and,  if  nothing 
intervenes  to  obviate  such  a  result,  will,  in  so  far  as  prices  are 
affected  by  the  precious  metals,  exhibit  the  highest  average  prices, 
at  least  in  articles  of  unrestrained  import. 

But  there  is  a  cause  which  checks  the  likelihood  of  a  high  level 
of  prices  in  a  country  whose  trade  gives  it  a  great  control  over 
the  supplies  of  gold  and  silver  which  are  produced  and  exist.  This 
is  the  amount  of  foreign  debt  which  is  held  by  the  exchanging  or 
importing  country.  If  a  country,  say  England,  has  made  great 
loans  to  other  countries,  it  has  generally  created  the  loans  by 
exports,  and  when  lending  is  brisk,  the  export  trade  is  active. 
But  it  receives  the  interest  on  its  loans  by  imports,  especially  of 
raw  material,  and  when  the  indebtedness  is  heavy,  the  debtor 
country  is  forced  to  press  the  produce  by  which  it  liquidates  its 
liabilities  on  the  importing  or  creditor  country.  The  effect  of  this 
operation  may  be  to  induce  the  phenomenon  of  continual  over- 
supply,  and  with  it  the  excessive  cheapening  of  materials.  This 
result  is  aggravated  if  the  debtor  and  exporting  country  adopts 


FOBEION  8ILVEB  AND  GOLD  OOVEBNED  BY  TBADE.     2G1 

a  protective  tariff,  for  by  this  policy  it  curtails  its  own  power  of 
exchange,  and  is  constrained  in  order  to  meet  its  obligations  to 
force  on  the  market  a  larger  amount  of  its  own  goods.  I  mention 
this  here  because  it  has  its  effect,  as  I  shall  show,  on  the  circula- 
tion of  money.  It  is  of  greater  significance  still  when  one  considers 
its  effect  on  the  progress  of  young  countries. 

No  country  takes  more  money  than  it  needs  for  purposes  of 
circulation,  and  for  the  due  support  of  its  paper  substitutes.  It  is 
quite  likely  that  it  knows  with  so  much  exactness  that  the  want 
can  be  supplied  at  discretion,  that  the  banks  can  leave  the  adjust- 
ment of  currency  to  circulation  to  the  bullion  merchant,  who 
watches  the  ebb  and  flow  of  international  money  with  the  intelli- 
gence and  acuteness  which  come  from  experience.  But  the  function 
of  the  bullion  dealer  is  after  all  that  of  a  middle  man  only,  and  the 
circumst^^nces  must  be  provided  before  the  middle  man  can  inter- 
vene. Now  I  cannot  but  think  that  a  country  which  has  not  only 
an  active  trade,  but  is  an  extensive  creditor  of  other  countries,  has, 
by  virtue  of  the  latter  position,  a  far  larger  power  over  international 
money  than  one  which  is  not  in  this  position,  and  that  it  was,  in 
the  first  place,  the  magnitude  of  its  trade,  and,  in  the  next,  the 
enormous  amount  of  foreign  debt  which  it  holds,  which  made,  and 
will  continue  to  make,  London  the  monetary  centre  of  the  world, 
and  able,  with  the  least  possible  rise  in  the  rate  of  discount,  to 
attack  the  store  of  international  money  most  effectually. 

I  have  now,  I  trust,  stated  with  sufficient  distinctness  the  laws 
which  govern  prices,  and  have  indicated  how  universal  they  are. 
They  are,  you  will  understand,  those  which  affect  temporary 
exaltations  and  depressions,  as  scarcity  and  plenty  characterize 
supply.  The  causes  of  high  and  low  prices  are  permanent  in  their 
character,  and  may  have  a  long,  perhaps  an  enduring,  effect  on 
societies.  I  cannot  indeed  attempt,  nor  would  you  be  able  to  bear, 
a  minute  inquiry  into,  the  total  aggregate  of  causes  which  induce  a 
period  of  high  and  low  prices,  still  less  could  one  assign  its  precise 
effect  to  each  in  this  aggregate.  No  one  can  perhaps  do  much 
more  than  guess  at  the  force  which  each  of  these  many  causes  has. 
It  is  sufficient  if  the  man  of  business  can  foresee  them  with  suffi- 
cient accuracy  for  business  purposes.  I  shall,  during  the  rest  of 
this  lecture,  deal  with  some  high  and  low  prices  in  their  relations 


262  HISTOEICAL  EFFECTS  OF  HIGH  AND  LOW  PBICE8. 

to  labour  and  rent,  including  in  labour  the  true  profits  of  tlie 
capitalist  employer,  as  well  as  the  earnings  of  workmen.  I 
assume  that  you  entirely  understand  the  meaning  of  economic 
capital,  that  it  is  wealth  loaned  for  productive  purposes,  and  re- 
ceiving interest,  as  has  been  happily  explained,  as  the  wages  of 
abstinence. 

Nothing  strikes  the  student  of  prices  more  than  the  fact  that, 
taking  an  average,  that  is,  excluding  the  occasional  manifestations 
X  of  the  laws  governing  prices,  prices  are  so  uniform,  that  is,  the 
causes  governing  prices  are  so  unchanged.  This  uniformity  endures 
from  the  first  recorded  account  of  continuous  sales  and  purchases 
till  about  the  31st  of  Henry  VIII.,  a  date  which  is  not  arbitrary, 
and  very  convenient,  because  it  precedes  the  debasement  of  the 
currency,  and  it  follows  the  dissolution  of  the  larger  monasteries. 
The  period  which  I  have  dealt  with  is  280  years.  Now  in  the  first 
140  the  price  of  wheat  is  5s.  lOf  d.  a  quarter ;  in  the  second  140, 
5s.  llfd.  I  referred  also  to  the  price  of  lead.  In  the  first  140 
years  it  is  90s.  9^d.  the  fother ;  in  the  second,  104s.  4^d.  Similar 
illustrations  could  be  given  from  other  commodities.  The  causes 
which  determine  prices,  and  have  so  enormous  an  influence  in  our 
time  were  practically  unaltered  in  intensity  for  centuries  of  early 
\   Enghshlife. 

But  the  laws  affecting  prices  are  illustrated  to  the  fall.  Except 
in  1315,  1816,  1321,  1438,  and  1527,  there  are  no  years  of  famine 
during  the  whole  280  years,  that  is,  a  year  in  which  the  price  of 
wheat  rose  to  double  the  average  price.  It  is  true  that  the  famine  of 
the  first  three  years  was  excessively  severe,  was  without  parallel  in 
any  recorded  period  of  English  history.  We  may,  perhaps,  dis- 
regard the  stories  told  by  the  chronicler  monks,  who  dwell  on  the 
strange  viands  which  the  famishing  people  devoured,  but  there  is 
one  proof  of  the  calamity  which  is  conclusive  to  the  student  who 
investigates  prices.  It  is  that  the  price  of  labour  rose  permanently 
10  per  cent,  after  this  visitation,  evidence  that  the  number  of 
labourers  was  lessened,  and  that  the  survivors  took  advantage  of  it. 
In  1438,  when  the  scarcity  was  also  very  great,  stringent  measures 
•were  taken  to  prevent  the  exportation  of  food,  and  even  water- 
carriage  in  the  interior  of  the  country  was  prohibited,  from  a 
fear  lest  an  opportunity  should  be  given  of  shipping  corn  abroad. 


THE  EFFECT  OF  PLAGUES  ON  PRICES,  268 

The  most  notable  fact  m  the  history  of  the  fourteenth  century  is 
the  Great  Plague  of  1349,  which  reappeared  in  1861,  and  was 
epidemic  in  England  afterwards  certainly  till  1665.  It  probably 
at  its  first  visitation  destroyed  a  third  of  the  people.  Our  fore- 
fathers, I  regret  to  say,  were  astonishingly  dirty  in  their  habits. 
The  nations  of  Europe  were  in  no  country  over  cleanly  at  the 
time,  but  even  the  Spaniards  in  the  train  of  Philip  II.  commented 
on  the  extreme  sluttishness  of  the  EngHsh.  These  English,  they 
said,  live  like  pigs,  but  they  fare  as  well  as  the  king.  Long  after 
the  plague  began  they  had  not  changed  their  habits.  Even  in  the 
eighteenth  century  London  was  polluted  by  the  dead  and  the  living. 
A  broad,  open  river  of  filth  passed  through  London  at  the  bottom 
of  Ludgate  Hill,  and  two  minor  abominations  ran  across  the  Strand 
under  rickety  bridges.  Long  after  the  eighteenth  ceutury  set  in  a 
particularly  frowsy  market  was  held  between  the  Bank  of  England 
and  what  is  now  the  Mansion  House.  In  wet  weather  the  streets 
were  ankle-deep  in  pestiferous  mud,  and  in  dry  weather  in  pesti- 
ferous dust.  Sometimes  the  burials  in  London  were  double  the 
christenings.  When  the  plague  was  burnt  out  in  1666,  it  was  suc- 
ceeded by  spotted  fever,  i.e.,  typhus,  and  smallpox.  In  moderately 
healthy  years  the  death  rate  was  forty-one  to  the  thousand.  The 
population  of  London  was  only  kept  up  by  constant  immigration. 

Hardly  any  event  in  English  economical  history  has  been  so  full 
of  results  as  the  plague  of  1349  was.  It  emancipated  the  serf,  and 
it  demoralized  the  Church.  It  gave  occasion  to  the  teaching  of 
Wiklif,  and  assured  the  Eeformation.  Had  it  not  been  for  the  in- 
surrection of  1381,  and  the  identification  of  LoUardy  with  sedition 
and  rebelHon,  the  separation  from  Rome  would  have  occurred  in 
the  fifteenth  century.  The  tie  which  bound  Western  Europe  to 
the  Papacy  was  very  slender  at  the  Council  of  Constance,  when 
John  XXIII.  was  deposed  and  Martin  V.  elected.  But  the  English 
rulers  dreaded  the  Lollards,  and  remained  orthodox  and  uneasy. 
The  pious  Gascoigne  is  civil  to  the  Pope,  indignant  with  his  court, 
especially  contemptuous  of  the  English  bishops,  and  quite  ready 
for  the  dissolution  of  the  monasteries.  He  was  close  upon  Lollardy 
without  knowing  it. 

The  first  cause  of  this  change  was  the  laws  of  prices  as  I  have 
given  them  you  operating  upon  labour.  Labour  is  always  in  demand, 


264  HISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  PBICE8. 

and  the  supply  fell  short  of  the  demand  suddenly.  If  one-third  of 
the  population  perished,  and  this  represented  one-fifth  of  the 
adults  in  the  country,  for  the  disease  was  far  more  deadly  in  the 
towns,  Gregory  King's  illustration  would  nearly  double  the  price. 
Now  this  is  what  happened,  and  illustrates  my  first  law.  The 
wages  of  women  and  children  rose  far  more  than  those  of  adult 
males.     This  illustrates  my  third  law. 

During  the  fifteenth  century  famine  occurs  as  I  have  said  in  one 
year  only,  and  there  is  little  record  of  pestilence.  The  chroniclers 
and  farmers  tell  us  of  years  when  there  is  no  fruit,  of  summers 
dry  and  wet,  but  no  mention  of  sickness  occurs  till  1477,  '8  and  '9. 
In  1485  came  the  sweating  sickness,  a  disease  due  to  unclean 
habits,  which  seems  to  have  generally  affected  well-to-do  persons 
in  towns,  such  as  London  aldermen.  But  there  was  a  social 
disease  in  the  fifteenth  century  which  produced  grave  results. 
This  was  the  appearance,  at  a  most  difficult  time  in  English 
political  and  social  life,  of  the  younger  son.  The  Church  was 
exceedingly  corrupt.  The  monasteries  were  dens  of  greedy  and 
voluptuous  monks,  the  artisans  all  given  to  Lollardy,  and  the 
nobles  with  dozens  of  vendettas  everywhere.  The  peasant  farmers, 
who  were  exceedingly  prosperous,  appear  to  have  taken  no  side  in 
the  struggle. 

As  long  as  the  great  landowners  cultivated  their  own  estates, 
there  was  an  abundance  of  personal  property,  with  which  to 
portion  the  younger  son.  "When  the  stock  and  land  lease  followed, 
there  were  still  funds  for  this  purpose.  But  about  the  middle  of 
the  fifteenth  century  the  farmers  either  purchased  or  had  their  own 
stock,  and  took  the  land  without  borrowed  stock.  Not  a  few  bought 
small  estates,  and  land  ran  up  from  ten  to  twenty  years'  purchase. 
In  the  land  hunger  of  the  century  nobles  and  knights  even  purchased 
copyholds,  and  became  by  the  common  law  serfs.  When  they 
could  do  so,  they  asserted  that  part  of  Wiklifs  doctrine  for  them- 
selves which  affirmed  the  injustice  of  civil  inequaUty,  and  forced 
the  revision  of  the  liabilities  of  those  base  tenures.  I  found,  years 
ago,  a  most  curious  illustration  of  this  practice,  in  the  compulsion 
which  Sir  Ealph  Cotiller  and  other  Gloucestershire  gentlemen, 
tenants  of  the  manor  of  Cheltenham,  put  on  the  abbess  of  Sion, 
its  lady.    The  younger  son  became  exceeding  poor.     As  long  as 


TEE  YOUNGER  SON  AND  THE  CIVIL  WAE.  265 

the  war  with  France  lasted  he  could  find  employment,  and  if  he 
were  fortunate  and  thrifty,  fortune.  But  loot  seldom  sticks.  The 
war  was  over  in  France.  It  soon  began  in  England.  The  country 
was  full  of  soldiers  of  fortune,  and  they  went  on  fighting,  as  chance 
occurred,  from  St.  Albans  to  Bosworth,  thirty  years  of  pitched 
battles  and  guerilla  warfare.  Edward  and  his  judges  knew  what 
they  were  about  when  they  devised  a  plan  for  breaking  entails. 
Only  the  relics  of  the  factions,  some  five  thousand  on  each  side, 
fought  at  Bosworth.  The  rest  had  left  their  bones  on  wastes  and 
moors. 

The  downfall  of  England  under  Henry  VIIL  wa«  due  to 
economical  causes.  Perhaps  if  one  examines  his  Pipe  Kolls,  one 
eould  find  out  how  he  squandered  his  own  and  his  people's  money. 
I  know  that  he  had  twenty  palaces  or  more,  the  whims  of  the 
hour,  in  each  of  which  the  establishment  maintained  was  more 
costly  than  the  whole  expense  of  his  thrifty  father.  He  dissipated 
his  father's  hoards,  the  taxes  he  wrung  from  his  people,  the  for- 
feitures he  got  from  his  nobles,  whom  he  cunningly  played  off 
against  each  other,  the  old  and  the  new,  the  lands  of  the  monas- 
teries, the  spoils  of  the  monasteries,  the  loans  he  raised  which 
Parliament  excused  his  paying,  and  then  took  to  issuing  base 
money.  The  patriot  king  of  Mr.  Froude  appears  to  me,  who 
know  a  good  deal  of  his  goings  on,  to  be  the  very  worst  monarch 
who  ever  reigned. 

I  told  you  in  my  last  lecture  of  the  economical  causes  which 
brought  about  English  pauperism,  and  I  need  not  recapitulate 
them  here.  The  operation  of  law  shut  the  English  workman 
as  completely  out  of  the  laws,  and  the  causes  which  regulate  prices, 
as  he  would  have  been  if  he  had  been  made  a  chattel,  a  plantation 
slave.  To  him,  you  may  be  sure,  the  great  drama  of  the 
seventeenth  century,  so  noble  as  it  seems  to  me  in  its  beginning, 
so  outrageously  base  at  its  conclusion,  had  no  meaning  or  interest. 
I  dismiss  this  part  of  English  history  for  the  time  with  only  one 
comment  which  you  will,  I  think,  find  accurate.  In  the  first  half 
of  the  century  you  will  seldom  find  the  worst  men  base.  In  the 
last  half  of  the  century  the  best  men  are  rarely  anything  but  base. 
And  what  is  true  of  the  poUticians  is  true  of  the  men  of  letters. 
Shakespere  seems  to  me  to  be  like  his  owq  Prospero.      Dryden 


286  HI8T0BICAL  EFFECTS  OF  HIGH  AND  LOW  PBICE8, 

remodelled  his  play  in  the  spirit  of  Calibau,  who,  though  a  beast, 
is  a  poetical  beast. 

In  the  seventeenth  century,  to  confine  myself  to  the  merely 
economical  aspect  of  the  situation,  for  I  might  say  a  good  deal 
more,  occurs  an  exaltation  of  prices  on  the  grandest  scale.  It  is 
due  to  one  cause  only,  the  inundation  of  American  bullion  through 
the  machinery  of  trade,  the  depressing  causes,  lessened  cost  of  pro- 
duction and  diminished  cost  of  freight,  being  too  trivial  to  check 
the  rise.  And  besides  this  dominant  cause,  there  are  manifesta- 
tions from  time  to  time  of  the  laws  which  govern  prices  through 
prolonged  periods.  The  severe  plagues  of  1803,  1625,  and  1665, 
appear  to  have  had  no  compensative  power,  though  in  each  of 
the  first  two  years  more  than  a  fifth  of  the  London  population 
perished,  and  in  the  last  at  least  a  fourth.  It  is  always  very  hard 
for  wages  to  keep  up  with  prices,  however  freely  labourers  are 
allowed  to  use  their  own  discretion  in  combination,  and  the  effort 
would  have  been  impracticable  in  the  seventeenth  century. 
Wheat  rose  209  per  cent,  over  the  comparatively  high  prices  of  the 
first  half  of  Elizabeth's  reign,  meat  184  ;  while  labour  up  to  1642 
rose  only  32  per  cent.,  and  for  the  whole  period,  owing  entirely  to 
the  rise  during  the  Commonwealth,  100  per  cent.  Women's 
labour,  in  accordance  with  my  third  rule,  rose  only  15  per  cent., 
and  as  a  rule  prices  go  up,  each  decade  of  years,  till  after  the 
Eestoration,  after  which  there  was  some  little  decline. 

During  this  period,  too,  there  are  severe  and  prolonged  dearths. 
The  first  is  for  three  years,  1595-7  inclusive.  1608  and  1630  are 
years  of  famine.  In  the  five  years,  1646-1650  there  was  con- 
tinuous scarcity.  In  1661  wheat  rose  to  100s.  a  quarter,  a  price 
unheard  of,  and  never  paralleled  till  the  close  of  the  eighteenth 
century,  and  the  seven  years,  1692-1698  were  compared  to  those 
Egyptian  experiences  in  which  the  lean  kine  devoured  the  fat 
kine,  and  w^ere  as  ill-favoured  after  their  meal  as  they  were  before. 
The  seventeenth  century  fastened  pauperism  on  the  English 
labourer,  and  this  is  his  only  inheritance  in  the  strife  of  that  time. 

The  seventeenth  century  was  an  epoch  of  high  prices,  due 
entirely  to  the  cheapening  of  metallic  money,  and  unrelieved  in 
any  notable  degree  by  the  other  two  causes.  The  first  half  of  the 
eighteenth  century  was  an  epoch  of  low  prices,  due  almost  entirely 


THE  INVENTIONS  OF  THE  EIGHTEENTH  CENTURY.  267 

to  the  operation  of  the  second  cause  which  I  gave  you,  economy  in 
the  cost  of  production;  though  the  other  economy,  cost  of  transit, 
was  carried  on  with  great  success  by  the  construction  of  canals, 
improvements  in  the  art  of  ship-building,  in  the  invention  of  the 
chronometer,  and  the  practical  settlement  of  the  longitude  question. 
The  eighteenth  century  multiplied*  the  primitive  spinning-wheel 
and  hand-loom,  by  the  inventions  of  Arkwright  and  Crompton, 
and  a  hundred  others,  and  supplied  the  requisite  motive  power  to 
these  complicated  machines  by  the  capital  inventions  of  Watt.  I 
could  go  through  a  whole  host  of  these  inventions,  but  it  would  be 
superfluous.  They  have  employed  the  leisure  of  Mr.  Smiles,  and 
the  leisure  of  Itlt.  Smiles  was  very  respectably  employed.  There 
was,  however,  one  particular  direction  in  which  progress  was  made, 
and  to  which  I  must  recur.  I  alluded  to  it  before  when  I  treated 
the  economic  history  of  rent,  and  I  am  told  that  my  audience 
was  surprised  that  I  spoke  so  well  of  landowners.  Would  that 
the  public  spirit  and  great  usefulness  of  the  landowners  in  the 
eighteenth  century  had  been  as  hereditary  as  their  estates  and 
titles  are  ! 

During  the  seventeenth  century  tho  landlords  strove  to  get  all 
the  rent  they  could  out  of  their  tenants.  To  the  utmost  of  their 
power  they  forced  famine  wages  on  the  labourer.  To  the  utmost 
of  their  power  they  used  the  legislature  in  order  to  secure  famine 
prices  from  the  consumer.  As  far  as  they  could  they  levied  famine 
rents  from  their  tenants.  The  historical  evidence  on  this  subject  is 
cumulative  and  abundant.  In  consequence,  agriculture,  despite 
the  teaching  of  those  who  saw  how  Holland  and  Flanders  were 
thriving,  was  stagnant  in  England.  A  few  freeholders  tried 
experiments  and  succeeded,  but  they  were  too  poor  to  produce  any 
effect,  even  if  the  farmers  had  been  able  to  imitate  them.  "  The 
bane  of  husbandry,"  says  writer  after  writer  on  the  subject,  *•  is 
uncertainty.  Men  will  not  improve  if  their  rent  is  raised  on  their 
own  improvements."  Gregory  King,  in  the  curious  and,  on  the 
whole  as  I  believe,  accurate  account,  which  he  gives  of  the  saving 
power  possessed  by  different  classes  of  society,  credits  the  bishops 
with  the  largest  power  of  annual  accumulations,  the  tenant  farmers 
with  the  least ;  for  he  sets  the  former  down  as  capable  of  saving 
de400  a  year  out  of  an  average  income  of  ^1,300,  and  the  latter 


268  HISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  PRICES. 

■with  a  power  of  saving  twenty-five  shillings  a  year  out  of  an 
income  of  £42  10s. 

The  landowners  of  the  eighteenth  century  took  an  entirely  new 
departure.  They  no  doubt  raised  their  rents  when  they  could. 
Jethro  TuU,  who  wrote  on  agriculture  early  in  the  second  quarter  of 
the  century,  puts  the  average  rent  at  7s.  Arthur  Young,  who 
wrote  towards  the  end  of  the  third  quarter,  at  a  little  below  10s, 
an  acre.  They  deserved  every  penny  they  got,  for  they  themselves 
made  the  increase  possible.  Arthur  Young  blames  them  for  not 
raising  their  rents  more  generally.  But  Arthur  Young  knew  that 
the  security  of  the  tenant  was  essential  to  the  success  of  agri- 
culture. His  admiration  for  experimenting  and  improving  land- 
lords is  as  great  as  mine.  Only  those  landowners  who  know  how 
to  manage  their  own  property  as  well  as  a  good  farmer  does  can 
understand  what  rent  land  will  bear,  and  what  capital  it  needs. 
They  were  the  adopters  of  the  new  agriculture  in  England. 

Curiously  enough  the  movement  began  in  Norfolk,  which  has 
indeed  been,  in  the  economical  history  of  England,  the  original 
home  of  most  of  those  early  improvements  to  which  the  England 
of  the  past  owes  so  much.  It  is  not  easy  to  say  who  was  the  first 
pioneer,  whether  it  was  Lord  Townshend  of  Eaynham,  or  Mr. 
Coke  of  Holkham.  I  understand  that  the  farming  accounts  of 
Lord  Townshend  are  perfect,  and  I  hope  soon  to  see  them.  The 
present  Lord  Leicester  has  sent  me  some  of  those  drawn  up  for 
liis  distinguished  ancestor,  Lord  Lovell.  The  family  of  Coke, 
descended  from  the  great  Chief  Justice,  has  done  continuous  service 
to  British  agriculture  from  the  beginning  of  the  eighteenth  cen- 
tury. O  si  sic  omnes !  It  is  not  impossible  that  the  stories  as  to 
the  jealousy  of  the  Norfolk  landowners  at  Walpole,  may  mean  that 
they  were  led  to  prefer  a  country  life  to  a  political  one.  It  is  very 
likely  that  the  long  period  of  peace  and  progress  which  came  after 
the  treaty  of  Utrecht  may  have  dissuaded  men  from  taking  part  in 
political  struggles.  I  am  myself  disposed  to  believe  '  that  the 
motive  for  the  new  agriculture  was  enlightened  self-interest. 
The  relations  of  the  eastern  counties  with  Holland  and  Flanders 
had  long  been  intimate,  and  the  new  system  was  near  a  century 
old  in  these  countries. 

As  I  have  told  you,  the  new  system  consisted  in  getHng  rid  of 


THE  AVTHOBS  OF  THE  NEW  AGIUCULTUBE,       2G9 

bare  fallows  and  poor  pastures,  by  root  crops,  and  artificial  grass 
crops.  The  turnips  were  carefully  hoed  two  or  three  times,  and  by  this 
means  the  ground  was  cleared  of  weeds.  They  were  fed  off  by  sheep, 
and  by  this  means  the  land  was  adequately  dressed  for  a  subsequent 
crop  of  com.  The  corn  crop,  if  of  barley  or  oats,  was  followed  by 
a  crop  of  clover,  trefoil,  lucerne,  or  rye  grass,  sown  with  the  grain, 
and  left  after  harvest  to  form  a  fodder  crop  for  the  next  year. 
Occasionally  a  crop  of  rape  and  vetches  was  mixed  with  rye  grass, 
for  which  it  is  impossible  to  overmanure  fields.  In  Arthur  Young's 
time,  these  experimental  landlords  could  be  counted  by  hundreds, 
and  that  shrewd  and  honest  observer,  who  was  subsequently  put  at 
the  head  of  a  board  of  agriculture,  since  most  unwisely  allowed  to 
be  starved  into  non-existence,  is  enraptured  at  the  general  worship 
of  the  plough.  If  the  landowner  is  a  genuine  agriculturist.  Young 
visits  his  house,  measures  his  reception  rooms,  describes  the 
pictures  in  the  mansion  and  the  views  in  the  park.  If  he  is  not 
an  improving  landlord,  I  don't  think  that  the  possession  of  the 
finest  Carlo  Dolce  (for  which  painter  Young  entertains,  as  I  think, 
an  unreasoning  admiration)  would  have  persuaded  him  to  darken 
that  man's  doors.  Years  after  he  published  his  tours,  Arthur 
Young  visited  France  and  Italy,  and  gave  the  best  account  which 
has  ever  been  written  of  what  happened  when  the  peasants  were 
suddenly  liberated  from  their  feudal  dues  and  local  tyrannies  in  the 
autumn  of  1789.  Amid  the  crash  of  the  historical  French  famiUes 
and  the  omens  of  the  coming  Committee  of  Public  Safety,  the 
Mountain,  and  the  Terror,  Young  is  glad  when  he  can  get  the 
landowners  to  accept  his  toast  of  "  The  Plough." 

It  is  a  commonplace  to  say  that  nothing  teaches  like  example. 
The  landowners  of  the  eighteenth  century  did  what  the  English 
landowners  had  not  done  since  the  fourteenth,  cultivated  some  of 
their  own  property,  and  showed  their  tenants  how  successful,  how 
profitable,  such  agriculture  would  be.  They  soon  doubled  their 
corn  produce.  They  soon  trebled  their  general  produce.  They 
invented  or  adopted  agricultural  machines,  and  bettered  the  tra- 
ditionary tools  of  the  peasant  and  farmer.  They  revived,  in 
short,  under  better  auspices,  the  merits  of  the  fourteenth-century 
landowner,  which  had  naturally,  after  an  interval  of  nearly  five 
centuries,  been  forgotten,  and  were  first  recovered  and  proclaimed 


270  HISTOBICAL  EFFECTS  OF  HIGH  AND  LOW  FBICES. 

by  myself.  They  were  gradually  imitated  by  the  farmers,  and 
rents  inevitably  rose,  for  though  the  capacity  of  the  soil  has  its 
importance  in  agriculture,  its  success  depends  incomparably  more 
in  the  diffused  skill  of  the  cultivator.  Towards  the  close  of  the 
century,  Sir  John  Sinclair,  an  ardent  disciple  of  Young,  carried  the 
new  process  into  Scotland,  grafted  it  on  the  nineteen-years  lease, 
and  the  worst  system  of  agriculture  that  existed  in  Europe,  and  did 
more  good  to  Scotland  than  all  the  Campbells  that  ever  have  been 
born  and  admired  themselves. 

There  was  to  be  sure  a  peculiar  stimulus  to  agriculture  in 
England,  but  it  was  a  stimulus  which  was  slow  in  operating. 
The  Government  of  1660  imposed  heavy  protective  duties  on 
foreign  grain,  permitting  imports  only  when  com  had  reached  a 
famine  price,  a  price  which  it  never  reached  except  in  1661.  The 
Government  of  1688  added  a  bounty  on  exportation.  But  the 
effect  of  this  bounty  does  not  seem  to  have  been  felt  for  thirty 
years.  When  it  became  a  motive  it  was  only  a  gambling  one,  a 
chance  for  the  farmer  or  landowner.  But  I  have  little  doubt,  from 
the  eulogy  which  Young  gives  the  bounty,  that  it  did  operate  as  a 
stimulant  to  agricultural  operations  later  on. 
^  The  cheap  prices  of  the  eighteenth  century  were  undoubtedly  a 
great  boon  to  the  peasant.  His  wages  rather  rose  than  fell.  The 
harvest  payment,  as  may  have  been  expected  from  the  great 
increase  of  produce,  was  much  higher  than  it  was  in  the  seven- 
teenth century,  for  there  was,  as  you  will  anticipate,  a  great 
demand  for  his  labour  at  the  time.  But  the  price  of  produce  was 
very  low,  lower  than  it  had  been  in  the  seventeenth  century,  by  a 
considerable  percentage.  Now  as  I  mentioned  to  you  at  first,  high 
prices  of  produce  are  by  no  means  followed  by  high  rates  of  wages, 
nor  are  low  prices  of  produce  by  low  wages,  if  the  cheapness  is 
induced  by  a  diminished  cost  of  production,  or  what  is  the  same 
thing,  greater  production  at  equal  cost.  In  1731-2,  when  wheat 
was  20s.  a  quarter,  barley  lis.,  and  oats  9s.  6d.,  Lord  Lovell  reports 
as  the  result  of  the  new  agriculture  that  his  profits  on  his  outlay 
are  more  than  86  per  cent.  Of  course,  as  soon  as  this  was  under- 
stood and  the  new  system  learned,  the  rent  of  the  landlord  rose, 
for  rents  depend  only  in  a  slight  and  temporary  degree  on  natural 
fertility,  which  may  be  soon  exhausted,  and  in  a  large  and 
overwhelming  degree  on  the  skill  of  the  cultivator. 


THE  SEBVICES  OF  SIB  JOHN  8INCLAIE.  271 

High  prices  will  not  make  high  rents,  if  the  skill  is  undeveloped. 
Nor  will  they  if  the  skill  is  lost.  If  wheat  rose  in  England  to  50s. 
a  quarter,  and  other  kinds  of  grain  proportionately,  economic  rent 
would  not  increase  in  any  notable  degree,  unless  the  skill  and 
capital  of  the  existing  generation  of  agriculturists  were  induced  to 
compete  for  occupancy.  The  rise  in  prices  might  arrest  the  bank- 
ruptcy of  some  who  are  struggling  under  their  self-imposed 
burdens,  but  it  would  not  recall,  of  necessity,  a  single  sovereign  to 
the  soil,  or  set  in  motion  a  single  competitive  farmer.  People 
are  amazed  that  land  of  good  average  fertility  is  gone  out  of 
cultivation,  that  there  is  no  inquiry  for  it,  and  under  the  old 
system  there  seems  likely  to  be  no  inquiry,  even  though  it  be 
offered  at  nominal  rents,  on  long  leases,  and  with  discretionary 
tillage.  It  is  not  that  it  could  not  be  cultivated  with  a  profit 
under  such  conditions,  provided  capital  and  skill  were  forthcoming, 
but  it  is  that  capital  and  skill  have  been  extinguished  by  the  rents  1 
which  kept  rising  from  1852  to  1873.  Landowners  who  want  to 
let  land  are  crying  in  the  desert.  The  economical  conditions  are 
intelligible  enough  to  those  who  understand  economic  laws  and 
economic  causes.  The  conditions  of  agriculture  in  England  are 
at  least  equal  to  those  of  the  United  States,  the  freight  from 
which,  as  I  learn  from  the  authority  of  American  public  reports  is 
at  least,  in  these  times  of  cheap  transport,  9s.  a  quarter,  or  about 
one-seventh  of  a  penny  per  ton  per  mile.  The  soil  of  the  United 
Kingdom  is  better,  the  climate  better,  the  possibilities  of  high  farming 
better ;  for  all  root  crops  must  be  housed  in  autumn  in  the  United 
States,  and  carefully  kept  from  the  severe  frosts  of  the  country. 
The  insect  plagues  of  the  United  Kingdom  are  as  nothing  by  the  side 
of  those  which  afflict  farmers  in  the  United  States.  But  land  in 
England  is  going  out  of  cultivation.  I  hope  that  I  have  explained 
the  reason.  The  remedy  is  one  on  the  exposition  of  which  I  have 
much  inclination,  but  no  time  to  enter.  It  is  quite  certain  that  it 
does  not  reside  in  the  artificial  restoration  of  high  prices. 


xin. 

DOMESTIC    MANUFACTURES. 

The  numerous  early  conquests  of  England — The  advantages  of  the 
island's  natural  position — Slowness  of  England  in  the  arts,  in- 
dustrial and  other — The  skill  of  the  agriculturist — The  iron  and 
salt  worTis — BricJc-maJcing — Paper — Textile  industries — The  size- 
of  the  English  farms — The  insulated  character  of  English  life — 
The  density  of  the  Flemish  population — The  ruin  of  continental 
industry — The  developm^efit  of  English  industry  in  manufacture 
and  agriculture — The  condition  of  Europe  in  1763 — The  theory  of 
a  sole  market — The  effect  of  modern  wars. 

England  is  not  inhabited  by  a  naturally  inventive  nation.  We  read 
a  good  deal  in  certain  books  which,  while  purporting  to  give  us  an 
account  of  our  race,  have  uttered  a  thousand  plausible  flatteries, 
intended  to  be  soothing  to  our  insular  feelings,  and  to  assist  our 
industrial  Chauvinism,  about  the  greatness  and  progressive  power 
of  the  Anglo-Saxon  people.  Some  of  these  authors,  if  they  get  to 
learn  it,  find  that  the  Anglo-Saxon  race  had  not  unity  enough  to 
protect  England  against  invasions  like  their  own,  and  had  to 
succumb  to  Danish  rovers,  much  more  rapidly  and  hopelessly  than 
the  British  races  yielded  to  them.  Then  they  talk  of  "  the  Making 
of  England,"  and  treat  us  to  generalities  as  to  how  the  Norman 
invader,  who  made  even  shorter  work  of  the  English  than  the  Dane 
did,  induced  upon  the  English  race  those  habits  of  law  and  order 
which  have  made  us  the  envy  of  nations.  But  the  barons  of  the 
Conquest  exterminated  each  other  in  Stephen's  reign,  and  the 
Plantagenet  conquest  is  as  real  as  the  Norman,  which  it  followed. 
I  am  almost  weary  of  the  philosophy  of  history.   It  is  become  to  me 


THE  NUMEBOUS  EARLY  CONQUESTS  OF  ENGLAND.    'J,*]B 

as  unreal  as  alchemy  and  astrology  or  metaphysics.  You  who,  for 
inscrutable  reasons,  have  to  get  up  so-called  history,  and  be 
examined  in  it,  will,  I  trust,  find  it  wise  to  learn  what  I  am  con- 
vinced, as  time  goes  on,  you  will  find  it  even  wiser  to  forget.  Law 
and  order !  We  have  deposed  more  kings  than  any  other  European 
race,  and,  excepting  Kussia,  have  murdered  more,  or,  at  any  rate, 
have  acquiesced  in  their  deposition  and  murder. 

The  English  race,  I  must  confess,  who  am  the  desc^dant  of 
centuries  of  English  hfe,  and  that  of  the  wildest,  for  I  come  of  a 
Northumbrian  stock,  with  a  judicious  admixture  of  other  nationali-  | 
ties,  invented  very  few  things  in  the  mechanical  senee.  It  contributed 
but  little,  of  its  own  effort,  to  that  progress  which  lessens  cost  by 
invention,  by  the  adaptation  of  natural  laws  to  the  process  which 
manipulates  matter  and  turns  it  into  utility.  The  English  had 
greater  advantages  of  position  than  Flanders  had.  They  were  fairly 
free  from  foreign  attack.  Their  nobles  were  glad  to  turn  their 
swords  into  reaping-hooks.  The  peace  was  kept  at  home,  and 
every  one  was  interested  in  keeping  it.  The  temptation  to  shear 
sheep,  with  a  perpetual  market  for  the  produce,  was  great.  Now 
the  peace  cannot  be  kept,  unless  every  one  tries  to  keep  it,  they  who 
could  afford  to  break  it  with  impunity  most  of  all.  Besides,  they 
are  certainly  most  competent  for  national  defence,  who  can  spare 
for  foreign  aggression.  For  a  hundred  years  our  kings,  with  the 
sympathies  of  the  people,  strove  to  conquer  France.  Once  they 
almost  dismembered  it ;  once  they  almost  conquered  it.  If  Henry  V. 
had  not  died  at  Vincennes,  when  he  was  under  forty  years  of  age, 
what  might  not  have  happened  ? 

The  Flemings  were  the  weavers  of  Europe.  It  is  a  considerable 
business  to  clothe  the  world,  and  the  Flemings  undertook  the  busi- 
ness with  great  success.  That  we  learnt  all  our  knowledge  of  M  < 
weaving  from  the  Flemings  is  certain,  but  we  were  the  slowest  of 
pupils.  Even  in  the  Middle  Ages  it  was  seen  that  a  piece  of  cloth 
was  worth  at  least  eight  times  as  much  as  the  wool  is  from  which 
it  had  been  spun  and  woven,  and  that,  if  we  could  catch  the  art,  the 
wool  which  bore  an  export  duty  of  100  per  cent.,  with  ease, 
i.e.,  without  depreciation,  would  have  borne  m  the  shape  of  cloth, 
a  far  higher  duty,  and,  in  the  absence  of  duty,  a  far  higher  profit. 
We  had  extraordinary  advantages  of  cUmate,  but  we  either  did  not 

19 


274  DOMESTIC  MANUFACTUBE8. 

understand  them,  or  made  no  use  of  them.  As  I  have  told  you 
before,  I  do  not  detect  any  progress  in  the  arts  of  invention,  under 
which  the  process  of  production  was  cheapened,  for  centuries, 
except  in  two  arts,  paper  and  glass-making.  I  do  not  know  whence 
these  arts  were  derived,  and  how  they  were  improved.  But  I 
am  sure  that  they  were  both  of  foreign  origin,  and  that  their 
\  development  in  England  was  not  due  to  native  ability  or  to  native 
enterprise. 

Painting,  I  hope  it  may  be  said  without  offence,  is  the  most 
mechanical  of  the  fine  arts.  Were  it  not  mechanical,  I  am  sure 
that  over  three  hundred  men  and  women  of  genius  could  not  be 
painting,  w.ith  much  acceptance,  at  once.  It  is  the  only  one  of  the 
fine  arts  which  procures  the  fortunate  possessor  the  two  great  boons 
of  fame  and  fortune — the  fame  perhaps  evanescent,  though  not  as 
evanescent  as  that  of  an  author,  the  fortune  perhaps  permanent. 
Genius  in  mediaeval  England  was,  I  grant,  very  poorly  paid.  We 
do  not  know,  except  in  rare  cases,  who  were  the  builders  of  our 
great  cathedrals,  and  for  a  very  good  reason,  because  they  were 
generally  working  men,  at  shghtly  better  wages  than  their  fellows. 
Even  as  late  as  the  seventeenth  cejitury,  Dorothy  Wadham  paid  a 
pound  a  week  to  her  architect,  who  built  fifty  times  better  than  his 
descendant  in  the  craft,  who  gets  fifty  times  more.  Men  used  the 
skill  of  those  people  for  building  stately  tombs,  with  decorative 
imagery.  The  monument  of  Cardinal  Beaufort  is  a  great  work  oi 
art.  I  am  sure  that  the  effigy  is  a  perfect  hkeness.  I  have  often 
looked  at  it  in  Winchester  Cathedral  with  much  interest,  not  only 
as  a  noble  specimen  of  fifteenth-century  art,  probably  Flemish,  but 
as  the  effigy  of  nearly  the  last  great  clerical  statesman  of  the  Middle 
Ages. 

There  are  no  English  painters  till  the  eighteenth  century.  There 
are  no  portraits  of  Englishmen  till  the  sixteenth.  Had  they  ever 
existed,  they  could  not  all  have  been  totally  lost.  During  the 
fifteenth  century  Flanders  was  teeming  with  art,  and  Italy  had 
carried  it  to  perfection.  At  last  came  Holbein  and  his  school. 
Then  there  was  a  flying  visit  of  Eubeus,  who  painted  the  apotheosis 
of  the  first  Duke  of  Bucks  of  the  house  of  Villiers.  I  am  glad  that 
no  Englishman  was  competent  to  perform  the  degrading  function. 
Then  comes  Vandyke  for  a  more  lengthened  period.     After  him 


SLOWNESS  OF  ENGLAND  IN  THE  ARTS.  276 

there  is  Lely  and  his  pupils,  who  drew  portraits  on  speculation,  in 
hopes  that  the  sitters  (I  do  not  touch  on  their  character)  would 
buy.  I  have  read  through  the  list  of  portraits  of  this  kind  which  - 
he  had  on  his  hands  at  the  time  of  his  decease.  They  would  furnish 
a  Grosvenor  Street  gallery.  Then  comes  Kneller.  The  eighteenth 
century,  which  is  in  England  the  great  epoch  of  inventive  activity, 
Bees  the  beginnings  of  purely  English  art. 

I  have  referred  to  this  because  it  illustrates  my  position  by  a 
subject  with  which  all  Englisiimen  are  now  supposed  to  be  familiar ; 
occasionally,  I  fear,  more  familiar  than  informed.     I  know  nothing 
which  has  pained  me  more,  who  have  an  honest  pride  of  race,  than( 
to  feel  how  great  a  debt  in  every  department  of  art,  science,  philo-j, 
sophy,  invention,  we  owe  to  foreign  immigrants  and  foreign  teachers.'  ' 
Even  now,  I  fear,  a  Teutonic  certificate  of  proficiency  is  worth  more 
to  men  than  any  evidence  of  ability  which  they  can  procure  from 
their  fellow-countrymen.     Even  what  we  fondly  hoped  was  our  own 
is  being  demanded  by  other  races.     I  have  heard  that  Shakspere 
can  be  claimed  for  the  Welsh  race,  Milton  and  Chaucer  for  the 
French ;   for  the  philologers,  having  settled  the  origins  of   lan- 
guage for  the  next  six  months,  and  given  us  a  professor  or  reader 
for  each  epoch,  divert  themselves  with  the  race  derivation  of  our 
names. 

There  is  no  doubt  an  intimate  connection  between  art  and  utility, 
for  art  is  an  exponent  of  utility  in  its  best  sense,  and  the  homeliest 
conveniences  may  be  subordinated  to  art.  Now  the  economist  is  on 
the  look-out  for  the  processes  by  which  any  invention  has  served 
utility,  and  he  knows  that  art  and  utility  equally  study  fitness,  the 
best  adaptation  of  means  to  ends.  From  my,  perhaps  vulgar,  point 
of  view,  a  straight  drawn  furrow  in  a  fifty- acre  field  is  as  much  a 
work  of  art  as  the  curves  which  Xeuxis  and  Parrhasius  drew,  or 
Hogarth's  line  of  Beauty  is.  Perhaps,  horresco  referens,  it  is  nearly, 
if  not  quite,  as  difficult  of  perfect  acquisition  as  the  efforts  of  the 
artist  are.  The  other,  efforts  of  a  skilled  husbandman  are  artistic, 
though  they  seem  to  be  mechanical.  A  closed  or  open  drain  is  to 
be  made  on  or  round  agricultural  land.  The  fall,  we  will  say,  is 
one  foot  in  a  hundred.  It  needs  a  very  practised  eye  to  so  regulate 
the  declivity  of  the  ditch  as  to  secure  that  the  flow  should  be  even, 
and  no  part  be  waterlogged.    I  could  multiply  illustrations  from  the 


276  DOMESTIC  MANUFACTUBE8. 

husbandman's  craft  by  which  I  could,  as  1  think,  prove  that  his  art 
is  of  a  high  order  ;  that,  if  genius  consists  in  a  rapid  and  an  almost 
intuitive  adaptation  of  means  to  ends,  the  English  peasant  has  his 
genius  ;  and  that  we  Englishmen  could  better  afford  to  lose  a  good 
many  people  of  far  higher  social  consideration  than  we  can  to  part 
with  the  peasantry. 

In  the  department  of  agriculture,  the  Englishman  of  the  four- 
teenth and  fifteenth  centuries  was  superior  to  the  husbandman  in 
every  part  of  the  world.  In  the  eighteenth  and  nineteenth  cen- 
turies he  recovered  his  pre-eminence  in  this  particular.  In  the  last 
two  centuries  he  has  made  great  progress  in  the  arts  of  hfe.  My 
object  in  the  present  lecture  is  to  trace  the  progress,  and  to  suggest 
an  explanation  of  the  delay  which  occurred  in  accepting  and  adapt- 
ing the  inventions  of  foreign  nations,  and  in  making  progress  in 
invention  ourselves.  But,  ia  the  first  place,  taking,  say,  the  end  of 
the  thirteenth  century,  let  us  consider  what  was  the  state  of  the 
industrial  arts  in  England  at  that  time. 

The  one  article  which  the  mediaeval  husbandman  desired  more 
than  anything  else  was  cheap  iron.  In  those  early  days  farmers 
kept  accounts,  and,  therefore,  were  well  acquainted  with  their  posi- 
tion, their  profits,  and  their  losses.  In  our  days  they  do  not  keep 
accounts,  and  have  therefore  easily  and  insensibly  glided  into  ruin. 
Now  in  these  bailiffs'  accounts  nothing  is  more  common  than  the 
apology  for  the  great  charge  which  the  bailiff  had  to  incur  in  the 
purchase  of  iron,  owing  to  the  dryness  of  the  season.  There  was 
reason  for  the  complaint  A  hundredweight  of  iron  in  mass  before 
the  Great  Plague  cost  as  much  as  six  bushels  of  wheat ;  after  it, 
more  than  twelve  bushels.  The  husbandman  was  therefore  warned 
that,  if  his  land  was  strong,  he  must  be  very  sparing  in  the  use  of 
iron.  Abundantly  as  iron  ore  is  diffused  in  England,  so  abundanily 
that,  till  recently,  we  almost  supplied  the  world,  the  art  of  working 
it  was  almost  unknown,  and  the  English  farmer,  to  a  great  extent, 
depended  for  this  necessary  material  of  husbandry  on  Biscay  and 
Sweden.  I  have  indeed  found  some  few  traces  of  iron  production 
in  England,  but  they  are  few  indeed  and  unimportant.  Now,  if 
iron  be  scanty  and  dear,  husbandry  suffers.  The  ploughing  is 
shallow,  the  pulverization  of  the  clods  imperfect,  and  the  efficient 
drainage  of  land  is  prevented.     I  see  no  natural  reason  why  the 


IBON  AND  SALT  W0BK8,  277 

Swede  and  the  Biscayan  should  have  so  entirely  surpassed  the 
Englishman  in  the  art  of  making  merchantable  iron.  I  am  aware 
that  Swedish  and  Biscayan  ores  are  remarkably  free  from  those 
admixtures  which  spoil  the  result,  admixtures  which  no  ancient 
skill  could  get  rid  of.  But  the  Sussex  and  North  Lancashire  ores 
are  not  inferior  to  these,  or  only  slightly  inferior,  and  were  cer- 
tainly, had  the  requisite  skill  been  present  in  England,  abundant 
and  obvious. 

It  may  seem  strange  to  you  that  I  should  name  another  product 
as  one  which  England  possessed  in  great  natural  abundance,  but 
did  not  possess  the  skill  to  utilize.  This  is  salt.  But  500  years 
ago  salt  was  a  most  important  article  in  the  economy  of  life.  For 
half  the  year,  owing  to  the  absence  of  winter  fodder,  the  mass  of 
the  English  people  lived  on  salted  meat.  On  St.  Martin's  Day, 
November  11th,  the  mediaeval  farmer  considered  seriously  what  was 
his  live  stock,  and  what  was  his  store  of  hay  and  straw.  It  was 
certain  that  he  had  not  enough  to  keep  his  cattle  and  sheep  through 
the  winter,  though  he  kept  as  many  as  he  could,  and  poor  enough 
their  condition  became  before  the  spring  grass  was  ready.  What 
he  saw  that  he  could  not  possibly  keep,  he  slew,  and  devoted  to  the 
powdering  tub.  Into  this  went  beef  and  mutton  for  winter  food  ; 
and  salted  mutton  would  be,  I  should  think,  detestable.  Now  for 
all  this  salt  was  required.  Our  ancestors  were  unable  to  use  the 
abundant  deposits  of  Worcestershire  and  Cheshire,  which  now  form 
the  material  from  which  soda  ash  is  manufactured  for  the  civilized 
world.  They  quarried  the  rock  salt,  but  did  not  know  how  to  refine 
it.  The  Eomans  did,  and  evidences  of  their  rock  salt  mines  are 
stin  found'.  It  is  only  towards  the  end  of  the  seventeenth  century 
that  salt  was  procured  from  these  natural  deposits.  As  far  as 
home  supply  went,  they  depended  upon  the  produce  of  salterns  or 
wyches  on  the  sea  coast.  But  the  product,  often  described  as  black 
and  grey,  was  sufficiently  uninviting.  The  greater  part,  and  the 
best  of  their  supply  came  from  South-western  France. 

I  have  mentioned  the  domestic  use  of  salt.  There  was  as  im- 
portant a  commercial  use  in  the  cod  and  herring  fishery.  The 
discipline,  perhaps  the  policy,  of  the  Roman  Church,  prescribed  a 
fish  diet  for  a  considerable  part  of  the  year.  To  those  who  did  not 
possess  ponds  or  stews,  salt  cod,  salt  herring,  salt  salmon,  salt 


278  DOMESTIC  MANUFACTUBES. 

'Sturgeon,  salt  eels,  were  an  important  article  of  diet.  Now  the 
fisheries  of  Yarmouth  Roads  were  always  considerable.  So  were 
the  different  kinds  of  cod  obtained  from  the  shoals  of  the  German 
Ocean,  the  Scotch  coast,  and  the  coast  of  Iceland.  Most  of  this 
fishing  was  in  the  hands  of  the  eastern  towns,  till  in  the  fifteenth 
century  the  Bristol  merchants,  by  the  aid  of  the  mariner's  compass, 
mailed  through  the  tempestuous  seas  of  the  Scottish  Archipelago, 
and  reached  the  Iceland  fisheries.  For  a  successful  fishery,  cheap 
and  abundant  salt  was  needed.  Then  they  had  rivals.  The 
Flemings  were  bold  fishermen.  They  nicknamed  their  political 
parties  by  the  names  of  the  cod,  and  the  hooks  which  caught  the 
fish.  A  Fleming  or  Hollander  (the  distinction  was  then  only  geo- 
graphical) discovered  a  new  way  with  which  to  cure  herrings,  and 
great  wealth  accrued  to  the  Low  Countries.  So  honoured  was  this 
local  fish-curer,  that  Charles  V.,  who  let  his  Netherland  subjects 
know,  rather  too  frequently,  how  highly  he  valued  the  wealth  which 
they  accumulated,  ordered  mass  to  be  said  at  the  man's  tomb,  and 
himself  attended  the  ceremony.  A  generation  later,  and  the  fisher- 
men of  Holland,  the  Beggars  of  the  Sea,  began  the  foundation  of 
the  Dutch  Eepublic  by  the  capture  of  Brill.  The  Dutch  fishermen 
manned  the  ships  which  went  out  for  discovery,  for  trade,  and  for 
the  capture  of  the  Spanish  treasure  fleets,  for  the  exploits  of 
Linschoten  and  Heemskirk,  and  a  thousand  other  heroes.  A  gene- 
ration later,  and  a  pretty  quarrel,  fortunately  only  on  paper,  sprung 
up  between  our  Selden  8,nd  the  Dutch  Grotius,  in  reference  to  the 
use  of  the  high  seas  on  the  eastern  side  of  England,  in  which 
Selden  was  in  the  wrong  and  Grotius  in  the  right.  At  that  time, 
however,  Selden  was  desirous  of  being  on  good  terms  with  James 
I.,  and  such  a  desire  was  an  effectual  check  to  an  author  being  in 
the  right. 

But  the  English,  with  abundant  coal,  sea  and  pit,  as  they  dis- 
tinguished the  Newcastle  and  inland  beds,  and  with  vast  treasures 
of  salt  which  they  quarried  for  a  few  fancy  purposes,  did  not  take 
any  step  for  two  centuries  in  the  direction  of  producing  that  upon 
which  so  much  depended.  If  they  had  made  the  salt,  they  might 
have  obtained  enormous  profits  by  leaving  the  fishery  to  the  Dutch, 
and  supplying  them  with  cheap  material  for  curing. 

Another  art  of  great  value,  long  practised  in  Eoman  Britain^  of 


BBICK-MAKING.  279 

which  indeed  plenty  of  evidence  remains  now,  but  of  which  much 
more  existed  five  or  six  centuries  ago,  was  the  art  of  brick-making 
and  brick-burning.  It  had  been  entirely  lost.  Not  a  single  brick, 
I  believe,  was  made  in  England  between  the  fifth  and  the  fifteenth 
centuries.  There  are  some  brick  buildings  of  an  earlier  age,  as  the 
church  of  St.  Pancras  at  Canterbury,  and  the  church  in  Dover 
Castle.  But  the  former  was  built  from  the  ruins  of  a  Roman  basi- 
lica, given  to  St.  Augustine  for  the  new  worship,  and  is  the  most 
ancient  site  of  that  new  worship  in  England.  The  church  of  Dover 
was  built  of  brick,  brought,  I  do  not  doubt,  in  ballast  from  the 
Baltic,  from  Liibeck  or  Bremen.  Brick,  however,  as  every  one  can 
see,  was  common  eno*agh,  from  the  Netherlands  to  the  Baltic  pro- 
vinces of  Russia,  for  centuries  before  it  was  reintroduced  into 
England.  It  seems  amazing,  that  what  English  people  from  London 
or  elsewhere  must  have  seen  everywhere  in  the  region  with  whose 
commerce  they  were  so  familiar,  should  not  have  been  early  manu- 
factured in  England,  especially  as  tiles  were  made  abundantly. 
Building  stone,  though  common  enough  in  some  places,  and  gene- 
rally available  for  churches  and  castles,  is  not  by  any  means 
distributed  over  England.  As  late  as  the  beginning  of  the  seven- 
teenth century,  the  improvement  of  the  Thames  navigation  between 
Burcot  pier,  near  Dorchester,  to  Oxford — between  which  points  the 
river  was  crossed  by  impassable  or  unnavigable  shallows — was  de- 
clared urgent  in  Acts  of  James  I.,  in  order  that  Oxford  stone  should 
be  conveniently  carried  to  London.  Brick  earth  is  much  more 
widely  distributed  than  stone.  But  it  was  not  employed  for  what 
is  now  so  obvious  a  use. 

The  first  purchase  of  brick  which  I  have  noticed  is  at  Cambridge, 
in  1449.  In  1453  I  have  found  it  in  London.  In  1461  it  occurs 
at  Oxford,  where  it  was,  and  remained  for  two  centuries,  very  dear. 
I  conceive  that  the  art  was  copied  from  the  practice  of  the  Flemings. 
Before  the  fifteenth  century  was  over,  brick  became  the  common 
material  for  building  in  the  eastern  counties.  In  the  sixteenth,  it 
was  generally  used  in  London,  and  along  the  Lower  Thames.  It  was 
the  favourite  material  of  Henry  VIII.,  whose  mania  for  building  was 
excessive,  and  who  made  use  of  it,  I  have  no  doubt,  because  it  was 
so  costly.  Certainly  the  brick  of  the  sixteenth  century  was  admirably 
made.  It  was  almost  a  work  of  art  in  itself.  I  have  seen  arches  with 


280  DOMESTIC  MANUFACTUBES. 

very  flat  crowns,  built  in  the  early  part  of  the  sixteenth  century, 
which,  though  they  are  now  the  substratum  of  ruins,  and  covered 
with  rubbish  and  earth,  are  as  sound  as  when  they  were  set  up.  Our 
ancestors  were  slowfe  ^  adopt,  still  more  slow  in  invention  ;  but  when 
they  had  adopted  a£  invention,  they  did  their  work  well.  In  our 
time  matters  are  painfully  reversed.  But  the  modern  tradesman, 
whose  raison  d'etre  is  to  use  the  skill  which  he  possesses,  and  you  do 
not,  to  supply  you  with  genuine  articles,  generally  employs  what 
abilities  he  has  in  cheating  you.  I  have  given  you  the  economical 
defence  of  his  existence,  and  its  too  frequent  perversion. 

The  curious  thing  is  besides,  that  other  branches  of  the  great 
f  Teutonic  race  were  distinguished  in  past  times  for  capital  inventions. 
It  is  a  dispute  where  paper  was  first  made  from  hnen  rags.  The 
earliest  piece  which  I  have  seen,  and  certainly  the  rudest  in  manu- 
facture, for  a  fair-sized  fragment  of  the  original  rag  is  still  in  the 
structure,  is  undel*  the  date  1335.  It  is  a  bill  for  spices,  no  doubt 
bought  at  the  London  shop  of  some  Bruges  merchant.  But  it  is 
more  than  two  centuries  aftei  this  that  the  English  are  credited 
with  having  attempted  the  manufacture  of  paper.  It  is  said  that 
Bishop  Thirlby,  the  last  abbot,  and  the  first  and  last  bishop  of 
Westminster,  induced  one  Kemigius,  a  German,  to  set  up  a  paper  mill 
in  or  near  London,  at  or  about  the  middle  of  the  sixteenth  century. 
It  seems  that  the  project  failed,  for  a  poem,  published  in  1588,  which 
contains  a  eulogy  upon  one  Spillman,  a  German,  and  court  jeweller 
to  Elizabeth,  who  was  successful  in  his  undertaking  at  Dartford, 
states  that  he  was  the  first  fp  introduce  the  industry  in  England. 
Unless  I  am  mistaken  the  Dartford  paper  mills  are  still  well  at  work. 

The  great  invention  of  printing  was  the  work  of  the  Ehenish 
Germans,  and  it  appears  at  Mainz.  It  was  introduced,  as  we  know, 
into  England  by  Caxton,  about  thirty  years  later.  He  learnt 
the  art  in  the  Netherlands.  His  successors  in  the  art,  such  as 
Wynkyn  de  Worde,  were  foreigners,  or  taught  by  foreigners.  The 
principal  printer  of  Henry  VIU.'s  reign  is  Berthollet,  whose  name 
may  be  taken  to  designate  his  origin.  Nor  do  I  think*  that  it  made 
much  progress  in  England.  It  seems  to  me  rather  to  deteriorate 
during  the  sixteenth  century ;  the  type  to  become  more  clumsy  and 
coarse,  and  the  impression  less  clear.  In  these  industrial  arts  then, 
which  I  have  taken  as  illustrations  only,  I  think  I  have  made  out 


PAPER.     TEXTILE  INDUSTBIE8.  281 

that  the  English  were  not  an  inventive  people,  and  that  they  did  I  V 
not  even  readily  adopt  what  other  people  had  long  invented.  I  will 
now  attempt  to  show  what  they  did  do,  to  venture  on  some  explana- 
tion of  their  exceedingly  slow  and  imperfect  progress,  and  to  give 
my  solution  of  the  movement  which  began  at  the  end  of  the  seven- 
teenth, and  became  characteristic,  traditional,  and  progressive  in 
the  eighteenth,  and  onwards.  The  causes  will  be  principally  seen 
to  be  social  and  political.  You  cannot,  of  course,  separate,  except 
in  thought,  and  then  only  with  no  little  risk  of  confusion,  economi- 
cal from  social  and  political  facts.  Fortunately,  though  some  of 
the  social  and  political  forces  are  enduring,  their  origin  is  so  far 
archaic,  that  they  need  not  frighten  the  most  sensitive  member  of 
the  Liberty  and  Property  Defence  League. 

Now  there  always  were  textile  industries  in  England.  There  was 
probably  hardly  a  home  without  a  spimiing  wheel,  hardly  a  manor 
without  half  a  dozen  hand-looms.  The  spindle  side,  if  it  be  not  one 
of  those  modem  affectations,  of  which  philological  pedants  produce 
many,  is  equivalent  to  maternal  descent,  and  the  universal  occupa- 
tion of  unmarried  women  is  enshrined  in  the  generic  term  of  spinster. 
These  domestic  industries  were  general,  at  least  to  the  middle  of  the 
eighteenth  century.  They  were  inevitable  in  early  times,  partly 
from  the  habits  of  the  people,  partly  for  a  cause  to  which  I  shall 
presently  refer.  But  I  am  thinking  of  local  industries  in  which 
the  persons  engaged  depended  for  the  whole,  or  for  the  main,  of 
their  liveHhood,  for  I  am  convinced  that  generally  they  who  engaged 
in  handicrafts  had  some  land.  The  market  was  too  precarious  for 
them  to  rely  entirely  on  such  an  industry.  I  have  often  found 
that  head  masons  and  other  artisans,  clerks  and  weavers,  are 
cultivating  knd  for  themselves,  or  occasionally  employed  in  field 
work.  The  Statutes  of  Labourers  allege  that  artisans  are  compellable 
to  serve  in  harvest.  la  the  Jong  vacation  lawyers  and  students  were 
remitted  to  husbandry.  When  Parliament  is  dismissed  or  pro- 
rogued, the  session  being  over,  the  Commons  are  sent  back  to  their 
fields,  the  Lords  to  their  pleasures,  as  the  royal  message,  with  un- 
conscious irony,  often  counsels. 

As  I  have  said  many  times,  the  principal  seat  of  the  textile 
industries  was  Norfolk.  The  county  was  in  close  communication 
with  the  Low  Countries     The  small  craft  of  the  time  went  across 


282  DOMESTIC  MANUFACTUBE8. 

to  the  eastern  coast,  and  hugged  the  shore,  the  German  Ocean 
being  generally  calm,  to  the  port  of  Norwich,  but  especially  to 
Lynn  and  Blal?eney.  The  characteristic  of  the  former  town  was 
that  it  was  villa  mercatorum.  Through  the  Norfolk  rivers  came  the 
merchandise  which  was  sold  at  the  great  fair  of  Stourbridge,  near 
Cambridge,  the  principal  mart,  while  it  lasted,  of  Eastern  England, 
and  even  of  all  the  southern  counties.  The  purchasers  of  cloth 
and  linen  do  not  often  designate  the  origin  of  their  pui^chases. 
But  Aylsham  linen  is  not  infrequently  named,  a  strong  woollen 
stuff  for  leggings  from  Worsted,  and  cloth  generally  from  Norfolk. 
It  is  more  than  probable  that  linen  cloth  which  went  by  foreign 
names,  such  as  Holland,  was  from  early  times  of  Ei\glish 
manufacture,  as  it  is  sometimes  expressly  said  to  be.  Sometimes 
linen  and  cloth  are  said  to  be  of  Irish  origin,  and  it  is  plain  from 
the  accounts  of  Roger  Bigod  at  the  end  of  the  thirteenth  century, 
who  having  married  one  of  Strongbow's  co-heiresses,  had  large  pos- 
sessions in  Ireland,  that  a  flourishing  manufacture  of  cloth  was 
carried  on  at  Carlow. 

Richer  people  bought  linen  from  Liege,  and  generally  from 
Flanders.  In  course  of  time,  much  linen  so  designated  is 
purchased  by  corporations.  But  the  custom  of  traders,  when 
foreign  goods  are  a  fashion,  to  call  domestic  goods  by  foreign 
names,  in  order  to  invite  the  custom  of  ignorant  purchasers,  is 
beyond  doubt  as  old  as  the  Middle  Ages.  The  boots  which  our 
modern  ladies  purchase  as  French  are  generally  manufactured  in 
North  London,  sent  out  to  Paris,  stamped  or  labelled  with  the 
names  of  French  houses,  and  reimported  intq  England  as  French 
goods.  Put  into  this  class  of  imports,  they  rouse  the  alarms  of 
Fair  Traders,  and  are  quoted  as  illustrations  of  one-sided  Free 
Trade.  I  have  often  had  to  point  out  this  among  other  such 
cases.  But  I  sat  for  some  years  for  a  leather- manufacturing  con- 
stituency. So  with  cloth.  The  purchases  of  great  people  were 
of  the  finest  Flemish  cloth.  They  obtained  velvet  and  silk  goods 
from  Genoa  and  Venice,  though  there  was  a  silk  manufacture 
in  London  in  the  fifteenth  century,  carried  on  by  women,  who 
complain  of  the  rivalry  and  frauds  of  the  Lombard  merchants, 
and  are  protected  by  an  Act  of  1454. 

There  were  two  metals,    important  products  of   this  island, 


TBE  SIZE  OF  TEE  ENGLISH  TOWNS,  285 

which  were  produced  for  Western  Europe.  They  were  lead  and 
tin.  The  former  was  mined  certainly  in  Derbyshire,  and  probably 
elsewhere,  and  was,  I  am  sure,  abundantly  exported.  The  other, 
a  Cornish  product,  was  subject  to  a  royalty  paid  to  the  Earl  or 
Duke  of  Cornwall.  The  whole  district,  in  so  far  as  it  produced 
tin,  was  subject  to  a  local  jurisdiction,  that  of  the  Stannary  Court, 
and  the  product  was  sold  at  a  staple  town,  Bodmin  generally. 

Now  I  imagine  that  the  manifest  check  to  invention,  and  the 
adaptation  of  manufactures  in  England,  which  were  prosperous  and 
progressive  abroad,  was  the  generally  agricultural  character  of  | 
England.  It  contained  one  large  city,  London,  which  had  between  I 
80,000  and  40,000  inhabitants.  York,  the  capital  of  the  north, 
came  next  with  11,000  ;  Bristol  had  about  9,500 ;  Coventry  about 
7,000;  Norwich  6,000;  Lincohi  about  5,000,  No  other  English 
town  had  above  5,000  inhabitants.  In  the  poll  tax  of  1377,  no 
town  in  the  counties  of  Bedford,  Surrey,  Dorset,  Westmoreland, 
Eutland,  Cornwall,  Berks,  Herts,  Hunts,  Bucks,  and  Lancashire 
was  deemed  worthy  of  a  particular  enumeration.  The  population 
of  forty-two  towns  is  given,  and  the  proportion  of  county  to  town 
population  in  the  last  quarter  of  the  fourteenth  century  is  nearly 
fourteen  to  one.  Such  a  proportion  is  indicative  of  the  urban 
population  which  the  whole  country  could  employ  and  provide  for 
either  in  manufacture  or  trade.  In  Colchester,  seventy-two  years 
before  the  poll  tax,  there  were  about  2,000  inhabitants,  of  whom  140 
were  householders,  designated  as  manufacturers  and  traders.  In 
1377  it  had  4,432,  but  the  eastern  towns  were  very  prosperous 
during  the  fourteenth  and  fifteenth  centuries. 

Parish  hfe  was  exceedingly  insulated.  The  custom  of  registering 
the  native  bom  children  in  the  manor  roll,  of  excluding  strangers,  or 
making  their  host  answerable  for  them  after  a  brief  visit,  and  of 
jthe  local  administration  of  justice,  must  have  tended  to  keep  the 
villages  very  much  apart.  In  my  native  village  in  Hampshire, 
even  as  late  as  my  personal  memory,  the  peasantry  expressed  an 
open  and  hearty  contempt  for  the  peasantry  of  the  two  neighbour- 
ing villages.  For  the  inhabitants  of  one,  they  had  nearly  as  much 
dislike  as  the  Southern  French  had  for  the.  Cagots.  It  was  said 
that  none  of  them  had  ever  intermarried  with  the  despised  race. 
Up  to  comparatively  recent  times,  no  road  passed  through  this 


284  DOMESTIC  MANUFACTUBES, 

vDlage,  but  merely  sldrtecl  it.  Tl^ere  was  a  theory,  and  I  believe 
one  with  some  foundation,  that  the  iniiabitants  were  descended 
from  the  ancient  Britons,  whom  the  Jute  settlers — it  was  in  the 
heart  of  the  Meonwaras — had  failed  to  drive  out  of  the  morasses. 

Such  insularity  was  unfavourable  to  invention  or  progress  in  the 
industrial  arts.  These  villagers  to  be  6ure  went  to  fairs,  got  rid 
of  their  wool  in  npighbouring  markets,  perhaps  some  of  their  corn, 
?nd  their  surplus  stock  of  sheep  and  cattle,  quite  as  frequently  to 
migratory  purchasers  as  in  regular  markets.  Eton  and  Winchester, 
and  some  of  the  colleges  of  Oxford  and  Cambridge,  went  far  afield 
in  the  fifteenth  and  sixteenth  centuries  for  supplies.  The  un- 
certainty of  the  home  market  discouraged  invention  if  it  did  not 
prevent  the  formation  of  special  industries.  The  busiest  time  of 
the  producer's  or  dealer's  year  was  at  the  great  fairs,  such  as  that 
St,  Giles,  Winchester,  and  Stourbridge.  In  the  former  of  these, 
as  my  friend  Dean  Kitchen  has  shown,  by  the  words  of  the 
Charter  which  he  has  published,  all  business  in  Winchester  and 
Southampton  was  suspended  for  three  weeks,  and  the  Mayor  and 
Corporation  of  the  city  of  Winchester  was  superseded  by  the 
bishop's  officials  during  the  same  period.  Of  course  the  traders 
rented  booths  on  the  hill,  and  probably  did  more  business  in  the 
three  weeks  then  in  the  rest  of  the  year. 

The  true  function  of  capital,  as  I  have  stated  more  than  once, 
is  to  keep  labour  in  continuous  action,  and  to  make  prices  as 
uniform  as  possible.  Now  the  motive  to  invention  is  a  saving  of 
labour,  and  the  stimulus  to  the  saving  of  labour,  is  the  prospect 
of  a  wider  or  more  active  market.  The  peasant  would  no 
doubt  have  been  glad  to  get  some  of  the  things  which  he  did 
not  make  himself  at  a  cheaper  rate.  But  the  producer  could 
not  anticipate  his  wants,  or  guess  that  he  could  better  his  market 
by  cheapening  his  wares.  Hence,  when  the  price  of  manufactured 
articles  was  doubled  by  the  calamity  of  the  plague,  there  was 
less  motive  than  ever  for  economizing  the  cost  of  production,  and 
lowering  the  prices,  when  the  contingency  of  a  lessened  amount  of 
producers  had  induced  the  effect  of  raising  it.  Invention  is 
stimulated  by  a  widening  market,  checked  by  a  narrowing  one. 

Now  let  us  compare  England  with  Flanders,  when  at  the  height 
of  its  commercial  and  manufacturing  prosperity,  i.e,,  during  the 


TEE  DENSITY  OF  THE  FLEMISH  POPULATION:       285 

reign  of  Charles  the  Bold  (1467-1477).  The  sea-board  was 
studded  with  large,  fortified,  and  wealthy  cities,  who  were  possessed 
of  great  municipal  privileges,  for  which  they  were  always  willing 
to  fight,  and  whose  burghers  were  the  manufacturers  of  Europe. 
The  trade  with  the  East,  in  so  far  as  its  products  were  accessible 
to  Western  Europe,  was  centred  at  Bruges,  the  exchange  of  Europe, 
and  the  negotiation  of  mercantile  bills  at  Antwerp.  The  difference 
between  a  given  weight  of  wool,  and  a  piece  of  cloth  manufactured 
from  the  wool,  was  eightfold,  and  of  this  produce,  as  far  as 
foreign  trade  went,  Flanders  had  the  monopoly.  The  country  was 
so  densely  peopled  that  it  could  not  be  maintained  on  its  own 
produce.  It  imported  barley  largely  from  Norfolk,  and  I  know 
that  two  of  the  great  Norfolk  families,  Fastolfe  and  Cromwell, 
grew  rich  by  this  traffic  in  grain.  The  Flemings  therefore  had  a 
market,  a  market  which  was  constantly  expanding,  as  long  as 
they  could  get  raw  material  for  their  looms  and  customers  for  their 
produce.  It  was  impossible  to  exclude  them  from  this  market  by 
protective  duties,  for  harbours  were  many,  ships  were  of  light 
draught,  and  a  preventive  service  was  out  of  the  question.  When 
two  centuries  after  these  events,  Colbert  tried  to  stimulate  the 
manufactures  of  France,  he  saw  that  a  subvention  might  be 
effectual,  but  prohibitive  duties  impracticable. 

The  progress  of  invention  in  Flanders  was  slight,  and  to  our 
experience  trivial.  But  at  the  time  it  was  very  real.  It  chiefly 
lay  in  the  extension  and  multiplication  of  industries,  in  the  perfec- 
tion of  products,  not  in  the  economy  of  the  process,  though  the  ^ 
development  of  special  skill  and  aptitude,  with  what  it  invariably 
implies,  a  division  of  employments,  is  a  real  economy  and  a  virtual 
invention.  The  Flemings  developed  the  art  of  the  wool-comber,  i.e., 
the  process  by  which  the  better  and  finer  parts  of  the  fleece  are 
separated,  the  first  and  most  important  step  in  the  manufacture  of, 
fine  goods,  one  which  English  inventors  have  since  carried  almost 
if  not  quite  to  perfection.  I  remember  some  years  ago,  telling  my 
late  friend,  Mr.  W.  E.  Forster,  when  on  a  visit  to  me,  that  the 
cloth  of  the  fourteenth  century  (I  might  have  said  on  Shakspere's 
authority)  was  coarse  and  full  of  hairs.  He  asked  me  on  what 
ground  I  said  this,  as  he,  a  woollen  manufacturer,  would  be  glad 
to  know.     So    I    carried  him  off  to  the  lodge  at  New  College, 


286  DOMESTIC  MANUFACTUBE8. 

where  the  warden  preserves  William  of  Wykeham's  mitre  case 
and  valise,  and  bade  him  take  note  of  the  stuff  with  which  it  was 
lined  in  proof  of  my  statement.  He  then  saw  why  in  Shak- 
spere's  time  winter  garments  had  to  be  lined.  I  have  come  across 
many  historical  and  economical  inductions  which  are  worse 
founded  than  mine  was.  A  man  in  an  English  winter  might  as  weU 
have  dressed  himself  with  a  hurdle  as  with  English  woollen  cloth. 

Although  I  believe  that  the  manufacture  of  English  cloth  for 
home  use  and  for  exportation  was  only  of  the  commoner  or  coarse 
kind,  it  soon  spread  from  Norfolk.  It  gets  to  Wiltshire  and  Dorset 
in  the  fifteenth  century,  as  I  know  from  purchases.  In  course  of 
time,  it  is  made  the  subject  of  legislative  enactment,  mainly,  if  we 
can  trust  the  preamble  of  Acts,  to  prevent  fraud  and  the  cozening 
of  customers.  These  Acts  of  Parliament  instruct  us  as  to  the 
extension  of  the  industry  to  the  north.  It  probably  always 
existed  in  Yorkshire,  for  Leeds  and  Bradford  have  from  ancient 
times  been  marts  of  northern  produce.  Here,  as  we  know  from 
evidence  which  is  almost  modern,  these  textile  industries  were 
especially  home  products,  which  were  collected  by  factors  from  the 
bouses  of  the  weavers. 

Flanders  was  ruined  by  the  wars  of  religion.  Thousands  of  its 
weavers  became  emigrants.  They  came  to  England  and  France, 
especially  after  1567.  But  the  stream  was  incessant  during  the 
rule  of  Alva,  Parma,  and  the  Archdukes.  The  Exchange  of 
Antwerp  was  transferred  to  Amsterdam.  The  trade  with  the 
East,  by  which  the  cities  of  the  Rhine  and  Bruges  had  been  en- 
riched, was  destroyed  by  the  capture  of  Egypt  in  1516,  and  by  the 
Cape  Passage  route  to  India.  But  though  Flanders  was  desolated, 
England  made  little  industrial  progress  in  the  sixteenth  century, 
and  only  began  to  wake  up  in  the  middle  of  the  seventeenth.  The 
same  cause  was  at  work  as  before.  In  the  sixteenth  century  the 
rivalry  of  Flanders  was  annihilated,  in  the  seventeenth  that  of 
Germany. 

I  have  never  yet  heard  that  any  of  the  numerously  laborious 
and  learned  Germans  have  been  at  the  pains  to  give  us  an  account 
of  the  economic  condition  of  Germany,  from  the  Ehine  to  the  Elbe, 
and  from  the  German  Ocean  to  the  Alps,  when  the  horrible  Thirty 
Years  War  broke  out.     We  are  told  what  were  the  causes  of  that 


THE  RUIN  OF  CONTINENTAL  INDUSTEIES.         287 

war — the  bigotry  of  Ferdinand,  the  ambition  of  the  House  of 
Austria,  the  sudden  outburst  and  the  sudden  collapse  of  the 
Bohemian  revolt,  and  the  folly  which,  instead  of  uniting  Lutheran 
and  Calvinist  against  a  common  foe,  led  them  to  quarrel  and  be 
destroyed  in  detail.  We  know  also  what  were  the  insidious  purposes 
of  France,  matured  by  Henry  IV.,  put  into  practice  by  Eichelieu, 
and  persisted  in  till  the  collapse  of  France  in  the  war  of  1870. 
But  what  I  have  always  desired  to  know  is,  what  Germany  was 
before  1619.  We  know  only  too  well  what  it  was  after  1648,  and 
how,  when  weariness  had  brought  peace,  after  every  one  of  those 
who  had  taken  part  in  the  beginning  of  the  war  was  in  his  grave, 
Germany  was  wholly  ruined,  thrown  back  in  the  progress  of  nations 
for  two  centuries,  and  reduced  to  being  little  better  than  a  geo- 
graphical expression. 

England  was  in  the  midst  of  her  own  troubles,  and  the  laws  of 
Political  Economy,  or  at  any  rate  those  of  economical  progress,  are 
as  silent  during  warfare  as  those  of  the  constitution  are.  The  first 
half  of  the  seventeenth  century  was  a  miserable  time  for  the  j 
English  people,  however  crowded  it  may  have  been  by  great  men, 
and  stirring  events.  If  the  Commonwealth  did  not  bring  peace,  if 
the  time  was  not  ripe  for  the  Government  which  Cromwell  would 
have  established,  great  prosperity  followed  the  cessation  of  the  war. 
The  lot  of  the  labourer  was  lightened,  for  wages  rose  50  per  cent. 
The  policy  of  Enghsh  conquest  and  trade,  that  of  assuring  a  sole 
market  for  the  manufacturer  and  merchant,  though  vicious,  was 
disguised  by  a  success  which  was  not  due  to  the  pohcy.  England 
became,  during  the  reign  of  the  Protector,  again  one  of  the  first 
European  Powers,  which  it  had  ceased  to  be  since  the  miserable 
reign  of  Henry  VIII. 

About  the  middle  of  the  seventeenth  century,  or  a  little  later, 
Dud  Dudley,  a  base  cadet  of  the  house  of  Dudley,  discovered  new 
processes  for  smelting  iron  with  pit  coal.  Cast  iron,  Dudley's  product, 
was  known  in  the  days  of  EUzabeth,  but  Dudley's  inventions  gave 
it  a  high  commercial  value.  At  about  the  same  time,  or  a  little 
earlier,  the  forests  of  the  Sussex  Wealden  were  utilized  for  the 
manufacture  of  iron  and  glass.  Of  course,  to  modern  notions, 
the  process  was  very  wasteful  and  very  destructive,  for  within  a 
generation  Sussex  was  cleared  of  its  woods,  and  the  industries 


288  DOMESTIC  MANUFACTUBE8, 

decayed  for  want  of  fuel.  But  from  this  time  forth,  the  depen- 
dence of  England  on  foreign  iron  masters  ceased.  At  the  end  of 
the  century,  England,  by  the  welcome  she  gave  to  the  French 
T  Huguenots,  went  a  great  way  towards  appropriating  the  silk  in- 
dustry of  France,  though  not  permanently,  and  much  further 
towards  neutralizing  the  projects  of  Colbert.  The  art  of  refining 
rock  salt  was  rediscovered,  and  England  began  to  export  what  she 
had  previously  procured  from  abroad.  But  the  oapital  fact  of  the 
seventeenth  century,  in  the  last  half  of  it,  was  the  development  of 
the  East  India  trade;  with  the  home  production  of  articles  which 
should  be  exchanged  against  Eastern  goods,  the  great  development 
of  the  cloth  trade,  and  with  it  the  supersession  of  Spanish  cloth 
imports.  England  having  now  improved  her  manufactures,  the 
growth  of  the  Colonial  trade,  notably  with  the  Southern  American 
plantations,  and  with  those  of  the  Leeward  islands  which  belonged 
to  England,  especially  Jamaica  and  Barbadoes  followed. 

England  had  now  learned  how  suitable  her  climate  was  for  the 
manufacture  of  woollen  and  linen  cloth,  to  which  in  time  was  to 
be  added  cotton.  Davenant  states  that  Bishop  Burnet,  in  a  con- 
versation which  he  had  with  him,  informed  him  that  good  woollen 
and  linen  yams  could  be  profitably  and  perfectly  spun  in  a  moist 
and  equable  climaie  only,  while  silk  goods  could  only  be  brought 
to  perfection  in  a  clear  and  dry  atmosphere.  Now  this  is  perfectly 
true.  There  is  no  country  in  the  world  where  so  much  finish  can 
be  given  to  woollen  and  similar  goods  as  can  be  in  England,  by 
what  I  may  call  entirely  natural  processes.  The  migrations  of  the 
woollen  trade  are  illustrations  of  the  truth  of  Burnet's  remark.  It 
went  from  Norfolk,  the  driest  county  of  the  island,  to  the  west, 
where  the  rainfall  is  often  double  that  of  the  east,  and  excellent 
goods  are  still  produced  there.  But  in  time,  it  migrated  to  the 
north,  for  there  the  climate  is  as  equable,  and  the  motive  power 
of  coal  is  cheaper  and  more  ready.  I  regret  that  I  must  add,  that 
Davenant  quotes  the  bishop's  information  in  order  to  urge  the 
f  Tcible  destruction  of  the  Irish  woollen  industry,  since  Ireland, 
with  an  equally  convenient  climate,  might  rival  English  trade. 
Then  affirming  the  selfish  maxim.  Lucrum  cessans  est  damnum 
emergens,  he  urged  with  success  the  extinction  of  one  among  the 
many  Irish  industries  which  the  English  Parliament  exterminated. 


THE  DEVELOPMENT  OF  ENGLISH  INDUSTBY,        289 

The  eighteenth  century,  however,  is  that  in  which  more  than  in 
any  other,  invention  or  adaptation  made  rapid  progress.  Its 
beginning  is  marked  by  the  acceptance  of  the  new  agriculture,  a 
subject  on  which  I  have  frequently  commented,  and  at  some 
length,  for  it  is  one  of  the  most  interesting  and  instructive  facts  in 
economical  history.  But  it  was  not  as  a  discovery  original.  The 
new  agriculture  had  been  practised  for  a  century  in  Holland  and 
Flanders.  Its  success  is  constantly  commented  on  by  agricultural 
writers  of  the  seventeenth  Century,  who  are  never  tired  of  re- 
proaching the  English  with  their  slothful  and  backward  agri- 
culture, and  I  am  forced  to  say,  of  giving  distasteful  reasons  for  the 
fact.  "We  are  told  by  these  writers,  that  all  the  choicer  vegetables, 
common  enough  as  we  should  think  them  now,  came  from  Holland, 
and  that  a  gentleman's  or  farmer's  garden,  let  alone  his  fields,  did 
not  supply  him  with  the  commonest.  They  tell  us  also,  how,  in 
Brabant,  to  use  Arthur  Young's  phrase,  sand  had  been  turned  into 
gold,  by  liberal  and  just  covenants  between  landlord  and  tenan^t, 
and  by  securing  to  the  tenants  the  bond  fide  improvements  whi'jh 
they  had  made.  Among  the  many  benefits  which  Holland  has 
conferred  on  civilization,  that  of  improved  agriculture  is  not  the 
least.  Perhaps  in  time  to  come,  and  ere  it  be  too  late,  we  may 
take  another  lesson  from  Holland,  and  copy  her  land  system.  If 
we  do,  I  can  confidently  promise  the  landowner  in  the  United 
Kingdom  a  return  to  at  least  a  large  cantle  of  his  old  prosperity. 
But  as  I  have  been  often  obliged  to  affirm,  the  two  greatest 
obstacles  to  human  progress  are  the  prejudice  of  ignorance  and  the 
bigotry  of  science. 

The  last  half  of  the  eighteenth  century  was  the  great  epoch  of 
mechanical  invention  in  England,  or,  as  I  ought  now  to  say.  Great 
Britain,  for  Scotland  contributed  her  full  share  in  the  discoveries 
and  adaptations  of  Watt.  And  here  I  cannot  but  think,  that  the 
greatest  of  national  gifts,  if  it  be  diffused,  the  power  I  mean  of 
adapting  means  to  ends,  had  now  become  hereditary  in  our 
countrymen.  Captain  Galton  has  used  an  unlucky  phrase,  in  my 
opinion,  when  he  writes  about  the  heredity  of  genius,  and  illus- 
trates his  opinion  by  facts  drawn  from  the  heredity  of  logical 
powers.  With  us  economists,  all  the  phenomena,  which,  from  our 
judgment,  seem  to  contribute  to  industrial  skill  are  pressed  into 

20 


^90  DOMESTIC  MANUFACTUBE8. 

our  service.  It  is  plain  that  the  spread  of  education  in  our  gene- 
ration develops  an  aptitude  for  education  in  a  succeeding  gene- 
rition.  The  children  of  a  man  whose  logical  faculties  have  been 
cultivated  disclose  a  readiness  in  applying  their  faculties  to 
similar  results  which  appears  to  be  cumulative.  The  fact  is  con- 
stantly noticeable,  and  is,  I  think,  most  hopeful.  I  speak,  of  course, 
of  education  under  proper  conditions.  The  sprightliest  mind  may 
be  demoralized  and  degraded  by  silly  examinations  and  sillier 
examiners.  The  English  people,  I  will  not  go  nearer  home,  seem 
to  have  gone  mad  over  examinations.  I  remember  that  my  friend, 
Sir  W.  Harcourt,  told  me  that  an  excellent  female  domestic  at  the 
Treasury  was  constantly  in  danger  of  losing  her  place,  and  her 
employers  her  services,  because  she  could  not  come  up  to  the  Civil 
Service  standard  in  decimal  fractions.  Examinations  may  be 
necessary,  but  we  need  not,  like  the  **  gentle  Sicambrian"  Clovis, 
adore  them. 

Still,  I  cannot  but  think  that  the  political  condition  of  Europe 
counts  for  something  in  the  situation,  though  I  admit  that  the 
Briton  of  the  eighteenth  century  had  thrown  off,  at  least  in  some 
quarters,  his  hereditary  stupidity,  while  he  retained  his  dogged 
industry.  The  civilized  world  had  adopted  the  policy  of  endeavour- 
ing to  secure  by  force  of  arms  a  sole  market,  as,  under  altered 
circumstances,  France  and  Germany  are  trying  to  secure  now — the 
one  in  the  swamps  of  Tonquin,  and  in  the  malaria  of  Madagascar ; 
the  other  in  the  waterless  desert  of  Angra  Pequena,  and  in  the 
beerless  desert  of  North  New  Guinea.  But  when  every  one  thought 
the  policy  wise,  the  winner  in  the  game  had  his  advantages.  Now 
let  us  look  at  the  condition  of  Europe  at  and  after  the  Peace 
of  Paris  in  1763.  As  we  Englishmen  are  still  paying  interest  on 
the  bill  which  we  ran  up  then,  and  disavow  the  policy  now,  it  may 
be  well  to  examine  the  positive  gain. 

France,  our  nearest  neighbour,  was  stripped  of  nearly  every- 
thing. A  little  before  she  had  a  menacing  position  in  India,  a 
more  menacing  one  in  North  America.  She  had  a  preponderating 
influence  in  the  southern  half  of  the  Indian  peninsula,  and  held 
the  strings  of  an  intrigue  in  the  north-east  portion.  In  1763,  she 
was  left  with  Pondicherry.  In  North  America  she  held  Louisiana 
and  Lower  Canada,  and  was  constructing  a  chain  of  fortresses 


T^IE  CONDITION  OF  EUEOPE  IN  1763.  291 

from  the  south  to  the  north.  Nothing  could  have  been  more 
cleverly  strategic  thaiher  plan,  as  I  noticed  ir  several  places  when 
I  traversed  a  considerable  part  of  the  country  which  she  intended 
to  occupy.  Unfortunately  for  France,  she  had  in  Louis  XV.  a 
king  who,  while  living  the  life  of  our  Charles  II.,  affected  the 
policy  of  Louis  XIV.  The  Seven  Years'  War  really  created  the 
union  of  the  American  plantations,  and  gave  them  the  means  for 
the  War  of  Independence. 

Spain  counted  for  nothing,  and  all  Scandinavia  lor  next  to 
nothing.  Germany  was  again  torn  to  pieces  by  war ;  now  by  a 
dynastic  struggle,  as  a  century  before  by  a  religious  war.  Holland 
had  been  finally  ruined  by  the  house  of  Orange  in  the  person  of 
William  V.  The  Italian  States  seemed  past  hope.  England  alone 
came  out  with  the  universal  empire  of  a  sole  market.  Captain 
Cook  was  discovering  and  annexing  in  the  Pacific  and  Australia, 
and  England  had  at  last  a  chance  of  winning  a  greater  empire  of 
trade  than  the  Bull  of  Borgia  had  given  Portugal  and  Spain  to- 
gether. At  that  time,  it  would  have  cost  but  little  to  have  annexed 
the  Spanish  colonies,  and  for  the  elder  Pitt  to  have  exclaimed,  on 
behalf  of  the  British  Parliament,  '*  Uterque  Poenus  serviat  uni." 

Now  look  at  the  opportunity  for  the  manufacturers  who  had  the 
chance  of  supplying  a  sole  market.  The  seaboard  of  North 
America,  from  Nova  Scotia  to  the  borders  of  Florida  was  theirs. 
India  was  theirs,  and  without  their  permission  no  one  could  land 
cargo,  or  take  cargo  thence.  The  supply  of  this  market  so  largely, 
so  suddenly  extended,  was  in  the  hands  of  English  manufacturers 
and  merchants,  and  the  economy  of  production,  i.e.,  of  inventions 
in  aid  of  or  in  substitution  of  human  labour  was  the  obvious  and 
ready  road  to  wealth.  No  wonder  that  the  abilities  of  Arkwright, 
Crompton,  and  Watt,  were  called  into  active  exercise.  And 
though  in  a  short  time  the  reverse  of  the  Treaty  of  Paris  was  at 
hand,  and  the  acknowledgment  of  American  independence  was  to 
cut  off  half,  and  that  the  most  hopeful  half,  of  the  sole  market, 
the  EngHsh  were  equal  to  the  occasion.  They  discovered  that  a 
sole  market  was,  after  all,  by  no  means  so  absolute  a  good  as  they 
imagined,  and  they  began  to  build  up  a  new  colonial  empire,  more 
vast  than  that  which  they  had  lost,  under  a  new  and  far  truer 
maxim,  that  trade  follows  the  flag. 


292  DOMESTIC  MANUFACTUBES. 

Besides,  the  temporary  stimulus  which  the  sole-market  theory 
had  afforded, British  invention  was  made  permanent  by  the  natural 
effort  which  producers  who  have  embarked  their  capital  in  in- 
dustrial avocations  make  to  arrest  the  risk,  even  though  it  may 
prove  an  imaginary  risk,  of  decline.  Nations  which  have  made  no 
progress  in  the  industrial  arts  are  slow  to  move  and  apathetic. 
Nations  which  have  made  progress  are  exceedingly  unwilling  to 
lose  ground.  Again,  the  circumstances  in  which  Europe  was 
placed,  effectually  staved  off  competition.  It  seemed  that  the 
stars  in  their  courses  were  fighting  against  the  industrial  rivals  of 
this  country. 

A  few  short  years,  and  the  great  continental  war  broke  out. 
Every  throne  in  Europe  was  shaken,  even  in  countries  which  were 
not  invaded.  The  French  overran  Europe  from  the  harbour  of 
Gibraltar  to  the  city  of  Moscow.  In  the  eighteen  years  con- 
tinental war  there  was  no  leisure  for  the  arts  of  peace,  for  the 
growth  of  industry.  But  England  early  gained  the  mastery  at 
sea,  only  checked  by  the  folly  of  the  short  war  with  the  United 
Slates,  and  became  the  workshop  of  Europe.  Napoleon,  that  idol 
ofjfets,  fancied  that  he  could  destroy  the  English  factories  by  the 
Berlin  and  Milan  decrees,  and  being  a  clever  Italian  of  the  fifteenth- 
century  type,  that  depicted  by  Machiavelli,  denounced  the  penalties 
of  piracy  against  all  English  vessels  which  entered  continental 
ports  with  English  merchandise.  When  he  marched  to  Moscow  in 
1812,  his  soldiers  were  clothed  with  the  produce  of  Yorkshire 
looms,  i.e.,  he  found  that  the  exigencies  of  war,  from  one  point  of 
view,  had  to  override  the  exigencies  of  war  from  another  point  of 
view. 

The  peace  of  Europe,  from  the  Battle  of  Waterloo  to  the 
Crimean  War,  interrupted  only  by  a  few  transient  struggles,  was 
the  peace  of  languor.  During  this  period  the  European  nations 
were  recovering  from  the  losses  which  they  had  suffered  for 
eighteen  years  of  unbroken  bloodshed  and  waste.  The  epoch  was 
characterized  by  the  capital  invention  of  steam  transit  on  rail- 
roads, the  accomplishment  of  which  was  again  due  to  English 
invention,  and  was  suggested  by  the  obvious  advantage  of  cheapen- 
ing freight,  one  of  those  economies  in  production  on  which  I  have 
ahseady  commented.     It  was  English,  because  in  England  only,  so 


THE  EFFECT  OF  MODEBN  WABS,  293 

great  was  the  prostration  of  the  Continent,  was  the  accumulation 
of  capital,  and  its  expenditure  on  productive  works  of  deferred 
profit,  possible. 

The  wars  which  have  followed  have  been  brief,  for  the  Crimean 
was  the  longest  European  war,  the  civil  war  in  America  the  most 
prolonged.  But  though  they  have  been  generally  brief,  they  have 
been  exceedingly  destructive.  It  is  too  early  to  determine  or  even 
to  guess  at  the  effect  which  they  have  induced  on  the  resources  of 
the  states  which  have  waged  them.  The  utmost  we  can  at  present 
follow  is  the  economical  efforts  which  they  have  induced  on  industry 
and  trade,  especially  on  that  of  the  United  Kingdom.  Now  England 
was  very  little  affected  by  the  Crimean  War,  except  in  one  direc- 
tion. Up  to  the  time  in  which  hostilities  began  with  Eussia,  the  corn 
trade  with  that  country  was  of  great  significance  to  the  belligerents^,  so 
significant  that  when  war  was  declared,  Odessa  was  not  blockaded 
till  the  corn  fleet  was  dispatched;  and  nothing  was  left  to  blockade. 
But  indirectly  this  war  had,  followed  as  it  was  by  a  still  more 
significant  struggle,  a  singular  effect  on  values.  It  caused,  and  by 
a  chain  of  circumstances  assisted,  that  remarkable  increase  of 
agricultural  rent  (26^  per  cent,  between  1854  and  1879)  which  has 
been  a  prime  factor  in  the  agricultural  ruin  of  to-day.  The 
Bussian  corn  trade  never  recovered  the  collapse  of  the  Crimean 
War,  and  it  naturally  took  time  to  develop  it  elsewhere,  and  in  the 
interval  high  grain  prices  prevailed,  and  stimulated  an  agricultural 
sybtem  which  had  been  carried  to  perfection,  except  in  one  direc- 
tion, the  accurate  keeping  of  farmers'  accounts.  I  do  not  find  that 
the  Indian  Mutiny,  which  followed  the  Crimean  War,  had  much 
effect  on  English  manufactures  and  trade.  Had  it  happened  at 
the  present  time,  it  would  have  had  far  different  effects,  for  the 
wheat  exports  of  India,  which  have  unquestionably  brought  about 
that  over- supply  of  which  my  first  rule,  given  you  last  week, 
affords  the  interpretation,  was  at  that  time  non-existent. 

But  the  process  was  interrupted  by  the  four  years'  civil  war  in 
America.  No  war  was  ever  so  costly  and  so  destructive.  The  debt 
contracted  by  the  North  was  enormous,  the  waste  of  life  prodigious, 
the  destruction  of  property  incalculable,  the  arrest  of  development 
total  When  the  war  was  over,  the  demand  for  European, 
especially  for  English  products,  was  urgent,  so  urgent  that  it 

tll^lVERSlT^ 


294  DOMESTIC  MANUFACTUBE8, 

easily  overleaped  the  barrier  of  what  was  intended  to  be  a  pro- 
hibitive  tariff,  carried  through  the  American  Congress  by  Mr. 
Morrill,  as  the  price,  it  may  be  feared,  of  that  gentleman's 
allegiance,  a  tariff  which  rendered  the  restoration  of  waste  ex- 
ceedingly costly,  and  the  redempti'>n  of  the  Federal  Debt  exceedingly 
easy.  The  waste  replaced,  there  began  the  development  of  the 
North-west  corn  lands,  and  the  exportation  of  their  produce  to  the 
United  Kingdom. 

Then  came  short  but  sanguinary  European  wars.  They  were  all 
wars  for  frontier,  like  the  Crimean  and  American  wars.  There 
was  the  war  undertaken  by  Prussia  and  Austria  together,  for  the 
sake  of  pillaging  Denmark,  and  completing  the  German  frontier  on 
the  Baltic  and  the  German  Ocean.  The  quarrel  over  the  spoils 
between  the  two  brigands  came  briefly  after,  and  the  delimitation 
of  Austria,  which  suffered  a  further  delimitation  in  Northern  Italy. 
These  wars  were  short  and  costly,  and  wh^t  is  to  our  purpose, 
arrested  industrial  rivalry.  Lastly  came  the  Franco-German  War, 
the  latest,  perhaps  the  last,  struggle  after  the  success  of  the  policy 
of  Henry  IV.  and  Eichelieu.  It  is  difficult  to  say  whether  the  pay- 
ment of  the  indemnity  was  a  greater  loss  to  France  than  its  receipt 
was  to  Germany.  Why  I  may  be  perhaps  hereafter  able  to 
explain. 

Since  then  there  has  been  generally  peace  ;  but  such  a  peace  ! 
An  armed  peace,  if  prolonged,  is  more  destructive  of  economical 
prosperity  than  open  warfare  for  a  time.  I  do  not  see  that  the 
industrial  position  of  England  is  threatened.  The  German  and 
Belgian  are  to  some  extent  inventive,  the  former  especially  in 
chemistry  and  its  products.  But  they  are  much  more  disposed  to 
imitation.  Friends  of  mine  have  been  obliged  to  treat  persistently 
intrusive  Teutons,  who  desire  to  pirate  their  processes,  to  the  miU- 
pond  of  dye-works,  from  which  the  unwilling  bather  issues  an 
altered  man.  But  the  victories  of  piracy  are  limited.  At  present 
all  nations  but  our  own  effectually  block  the  impulse  to  invention 
by  protective  duties,  for  the  earliest  and  most  persistent  effect  of 
protection  is  to  disable  the  nation  which  adopts  it  from  the  just 
interpretation  of  its  own  faculties. 


XIV. 

THE    GUILD    AND    APPKENTICE    SYSTEM. 

The  organization  of  parish  or  manor — Of  towns — The  guilds  of 
London  and  elsewhere — Apprenticeships,  criticized  by  Adam  Smith 
— Motives  for  the  system — The  wages  of  artisans — The  property  of 
the  guilds — Combinations  of  workmen  hardly  taken  into  the  scheme 
of  economists — Economical  fallacies  generally  contain  some  truth — 
Mr.  Mills  wage  fund — Associations  of  capital  or  of  labour — The 
trade  union  a  partnership— The  emancipation  of  trade  unions — 
The  trade  union  a  remedy  against  socialism. 

Organization  was  the  essence  of  early  English  life.  In  the  country 
every  man  belonged  to  a  parish  or  manor,  and,  to  use  a  modern 
phrase,  had  a  stake  in  it.  The  landless  man  was  an  outlaw,  a 
thief,  a  brigand.  He  lurked  on  the  no-man's  land,  on  the  border 
of  the  settlement,  in  the  outlying  woods.  He  may  not  have  been 
a  very  unpopular  person,  when  he  plundered  Jew  or  Lombard,  or 
even  an  abbot,  particularly  if  he  were  one  of  those  foreigners  whom 
the  Pope  planted  in  an  English  benefice,  or  who  got  the  reward  of 
service  under  the  king,  or  was  the  object  of  royal  favour.  But 
the  landless  man  was  otherwise  included  in  no  organized  or  regu- 
lated parish  or  manor,  he  was  outside  the  universal  system  of 
English  life,  not  in  the  Middle  Ages  only,  but  long  afterwards.  The 
English  peasant  for  many  a  long  day,  even  up  to  recent  times, 
looked  askance  at  a  stranger  or  foreigner,  as  they  sometimes  called 
him,  when  he  was  imported  into  the  parish.  The  law  of  parochial 
settlement,  selfish  as  its  motive  was,  and  mischievous  as  its  results 
were,  was,  in  principle,  an  appeal  to  ancient  and  deep-seated 
traditions. 


296  TEE  GUILD  AND  AFPBENTICE  SYSTEM, 

Forms  which  are  obsolete  and  unintelligible,  and  now  abrogated, 
had  a  great  significance  in  old  times.  It  appears  that  the  consent 
of  the  settlement  was  necessary  for  the  introduction  of  a  new 
tenant  or  purchaser  under  the  lord.  It  is  certain  that  the  lord 
could  not  transfer  his  rights  to  a  stranger  unless  with  the  assent 
of  the  tenants.  This  practice,  from  which  was  developed  the  legal 
ceremony  of  attornment,  survived  in  some  particulars  to  the 
eighteenth  century,  when,  having  long  ceased  to  have  any  practical 
importance,  and  being  found  to  hinder  the  free  conveyance  of  land, 
attornment  was  wholly  abolished  by  statute.  I  am  disposed  to 
believe  that  the  action  of  the  homage,  the  view  of  frank  pledge, 
was,  from  what  I  have  gleaned  in  manor  rolls,  an  active  force, 
that  it  formed  in  some  particulars  a  consultative  council  for  the 
lord,  and  that  its  advice  or  assent  was  convenient,  sometimes  even 
necessary. 

The  development  of  a  homogeneoua  England  from  these 
curiously  separate  units  was  not  so  easy  a  matter.  It  was  early 
attempted.  The  doctrine  of  allegiance  to  a  central  authority, 
which,  if  we  can  trust  constitutional  antiquaries,  was  enforced  as 
early  as  the  days  of  Cnut,  may  have  gone  for  something,  but  I 
suspect  that  the  promissory  oaths  of  the  tenth  century  were  not 
found  to  be  more  binding  than  those  of  the  eighteenth,  when  a 
considerable  Parliamentary  party,  with  Shippon  at  their  head,  took 
the  oath  of  allegiance  to  the  Hanoverian  king,  and  assured  the 
exiled  family  of  their  unfaltering  devotion  to  the  Stuart.  If  tVe 
courts  of  the  hundred  and  the  shire  had  any  real  vitality,  and  but 
little  is  known  of  their  working,  they  would  help  to  take  tbe 
peasant  out  of  the  narrow  surroundings  of  his  immediate  home, 
and  suggest  a  wider  field  of  action  than  that  with  which  he  was  so 
familiar. 

It  seems  that  the  chief  agency  by  which  some  sense  of  nationality 
was  developed  was  the  administration  of  justice.  The  assize  of 
the  migratory  judges  executed  the  criminal  law  in  directions 
which  the  local  j  arisdiction,  however  large  its  powers  were,  could 
not  reach,  and  the  civil  side  determined  rights  of  property  in 
matters  where  the  local  authority  had  no  jurisdiction  at  all,  and, 
besides,  gave  publicity  and  force  to  its  decisions.  How  important 
these  decisions  were  conceived  to  be  is  proved  by  the  care  with 


THE  OBGANIZATION  OF  PABISH  OB  MANOB.        297 

which  these  judgments  were  reported  and  preserved.  The  student 
of  family  history  finds  the  greater  part  of  his  information  in  the 
record  of  judicial,  or  at  least  of  fiscal,  proceedings.  Again  the 
institution  of  the  new  system  of  direct  taxation,  after  an  assess- 
ment, following  on  a  Parliamentary  grant,  aided  in  the  develop- 
ment of  common  purposes.  We  are  told  that  in  consequence  of 
the  statute  of  1406,  by  which  all  suitors  in  the  County  Court  and 
others  were  declared  to  be  the  electors  of  knights  of  the  shire, 
"  outrageous  and  excessive  numbers  of  people,  and  of  small  sub- 
stance," had  chosen  them ;  and  therefore,  in  1430,  the  forty-shilliug 
freehold  was  declared  to  be  the  franchise,  further  limited,  two 
years  later,  by  an  amendment  that  the  freehold  must  be  in  the 
same  county.  So  widespread  an  interest  must  have  tended  to 
take  the  peasant  out  of  the  narrow  surroundings  of  his  ordinary 
life.  But  the  parochial  feeling  remained  strong  long  after  this 
time.  Again  it  is  probable  that  the  institution  of  the  justice  of  the 
peace,  and  the  statutory  increase  of  his  power,  which,  though 
local,  was  not  necessarily  identified  with  those  traditional 
boundaries,  had  a  further  effect.  At  any  rate,  it  straitened,  and 
finally  extinguished,  the  local  jurisdictions.  I  refer  to  these  facts 
because,  though  the  old  associations  were  weakened,  they  were  far 
from  being  lost.  In  some  particulars  they  were  even  strengthened, 
as  I  hope  to  show. 

The  organization  of  the  towns,  though  the  urban  population  was 
small  by  the  side  of  the  rural,  was  strict.  The  object  of  the  town 
was  to  get  a  charter  of  incorporation,  which  should  give  the  town 
local  authority,  and  the  administration  of  justice,  if  not  of  the  highest, 
in  considerable  degree, by  the  elected  ofiBcials  of  the  city.  Or  the  urban 
population  sought  to  confirm  and  enlarge  charters  already  given. 
Now  all  these  concessions  cost  money,  and  the  money  was  contri- 
buted by  those  who  were  to  enjoy  the  new  or  extended  privilege. 
But  it  was  not  to  be  expected  that  they  who  had  purchased  their 
own  urban  rights  would  freely  admit  strangers  to  the  advantages 
which  they  had  bought.  It  is  true  that,  in  theory,  the  town 
could  admit  strangers,  even  serfs  from  distant  places,  and  after  a 
time  could  protect  such  persons  in  the  freedom  which  had  been 
granted  them.  But  neither  policy  nor  self-interest  could  be  con- 
sulted by  making  the  town  an  asylum.    From  evidence  which  I 


298  THE  GUILD  AND  APPBENTICE  SYSTEM. 

Lave  collected  as  to  the  payment  of  head  money  or  chivage  by  non- 
resident serfs,  I  conclude  that  such  persons  did  not  conceive  them- 
selves to  be  enfranchised  by  mere  residence,  though  it  is  not 
unlikely  that  if  it  were  strong  enough  the  town  would  resent  the 
attempt  to  seize  a  person  of  servile  origin  after  it  had  determined 
on  adopting  him,  and  he  had  become  rich. 

The  principle  of  association  and  organization  was  extended  to 
the  two  universities.  It  is  not  known  when  either  of  these  was 
planted,  or  when  they  received  their  first  charters.  The  students 
at  Oxford  are  mentioned  in  the  reign  of  Henry  II.  in  the  chronicle 
of  Brakelond,  who  narrates  the  good  offices  of  his  hero.  Abbot 
Samson,  in  settling  some  difficulties  which  had  occurred  among 
them  and  the  city  authorities.  In  the  early  part  of  the  thirteenth 
century  Oxford  is  organized;  in  the  days,  for  instance,  when 
Grostete  was  the  leader  of  its  philosophy  and  other  studies.  In 
a  list  of  towns,  written  in  the  handwriting  of  Henry  III.'s  reign, 
the  schools  of  Oxford  are  mentioned  as  a  distinctive  feature  of  that 
town.  I  do  not  intend  to  draw  a  negative  inference  when  I  men- 
tion that  Cambridge  is  also  noted,  but  only  as  being  distinguished 
for  its  eels.  These  two  ancient  institutions,  when  they  come 
before  us,  are  self-governing  corporations,  having  a  ruler,  a  law, 
a-nd  judges  of  their  own,  holding  property,  real  and  personal, 
admitting  persons  to  their  franchises,  and  banishing  them,  and  are 
entirely  independent  of  the  municipalities  in  which  they  were 
situate.  In  course  of  time  the  urban  authorities  of  Oxford  town 
are  subordinated  to  the  university,  and  it  was  the  boast  of  the 
academical  corporations  that  they  were  entirely  exempt  from  any 
secular  or  spiritual  authority.  The  privileges  they  possessed  were 
confirmed  by  charters,  and  long  after  the  history  of  these  corpora- 
tions began  they  had  the  distinction,  alone,  I  believe,  among 
analogous  institutions,  of  being  confirmed  by  Act  of  Parliament. 
England  was,  in  short,  filled  with  associations,  customary,  chartered, 
and,  in  these  two  cases,  formally  legalized. 

The  principle  of  association  was,  however,  extended  beyond 
these  country,  urban,  and  academical  units.  The  members  of 
crafts  or  trades  organized  themselves,  enacted  their  own  bye-laws, 
regulated  their  own  business  or  merchandise,  and  finally  were 
incorporated,  in  some  cases  by  charter,  and  in  a  few  were  appointed 


THE  GUILDS  OF  LONDON  AND  ELSEWHEBE.        299 

the  machinery  for  enforcing  legislative  Acts ;  as,  for  instance,  the 
weaving  trade  generally,  by  a  special  corporation  created  under  one 
of  numerous  police  Acts  of  trade,  for  the  whole  county  of  Norfolk. 
In  London,  which  early  became  pre-eminent  for  its  wealth,  these 
trade  associations  or  companies  were  incorporated  by  charter, 
though  long  after  they  had  been  fully  in  operation  as  private  com- 
binations. The  charters,  I  believe,  date  from  the  fourteenth  century, 
but  I  have  been  told  that  the  site  of  the  Goldsmiths'  Hall  has  been 
in  the  possession  of  the  craft  from  before  the  Conquest.  Many  of 
them  were  accorded  considerable  duties.  The  London  goldsmiths 
were  very  early  consulted  in  what  is  called  the  trial  of  the  pyx, 
that  is,  the  verdict  that  the  officers  of  the  mint  had  satisfied  the 
indenture  under  which  they  were  entrusted  with  the  coinage.  The 
Merchant  Tailors  were  called  on  to  pass  the  cloth  which  was  pur- 
chased for  the  king's  army.  The  Grocers  were  directed  by  Acts  of 
Parliament  to  see  "  to  the  proper  garbling  of  spices."  A  search 
into  the  Statute  Book  would  no  doubt  result  in  the  discovery  of 
many  such  obligations,  and  an  examination  into  the  archives  of 
those  City  Companies  whose  records  survived  the  Fire,  and  have 
been  preserved,  would  give,  perhaps,  much  confirmation  as  to  the 
part  which  the  companies  played  in  the  poHce  of  trade.  They 
assumed,  or  were  permitted  to  make,  bye-laws,  and  some  curious 
illustrations  of  their  practice  have  been  published.  Thus,  for 
instance,  in  the  fifteenth  century,  the  Grocers'  Company  levied  a 
fine  of  £10  on  two  members  of  the  fellowship  for  the  offence  of 
taking  a  fellow  livery-man's  house,  by  offering  to  pay  a  higher 
rent  than  the  occupier  was  paying,  against  such  an  occupier  and 
fellow  Grocer's  will.  Half  the  fine  went  to  the  fraternity,  and 
"half  to  him  that  is  thus  put  out  of  his  house."  The  Act  of  15 
Henry  VI.  directs  that  the  ordinances  of  these  associations  shall 
be  certified  and  registered  by  the  justices  of  the  peace,  or  the  chief 
magistrate  of  cities  and  towns,  under  a  penalty  of  £10  for  neglect. 
This  enactment  indicates  how  universal  these  combinations  were, 
not  in  the  town  only,  but  in  the  country. 

The  whole  country,  and  not  alone  the  towns,  possessed  these 
organizations.  The  masons  had,  under  the  rule  of  the  heads  of 
their*  craft,  the  freemasons,  and  so  had  the  carpenters.  Under 
34  Edward  III.  cap.   9,  "aUiances  and  covines  of  masons  and 


300  THE  GUILD  4ND  APPBENTICE  SYSTEM. 

carpenters,  with  their  congregations,  chapters,  ordinances,  and 
oaths,  made  or  to  be  made,  were  rendered  void  and  annulled." 
Some  of  these  words  seem  like  the  technicalities  adopted  by  their 
reputed  successors,  the  modern  freemason.  Later  on  these  associa- 
tions were  declared  to  be  felonious.  The  combinations  of  the  artisans 
were  imitated  by  the  peasant  labourers,  and  we  are  told  that,  to 
use  modern  language,  all  labourers  during  the  last  ^quarter  of  the 
fourteenth  century  were  united  into  very  effective  trade  unions. 
But  it  is  quite  clear  that,  to  ensure  unity  of  purpose  and  cjDficiency 
in  action,  some  sacrifice  was  required  on  the  part  of  applicants  for 
admission  into  these  organizations.  Besides,  in  their  struggle  with 
the  capitalist  and  the  law,  they  had  need  of  a  common  purse,  and 
we  are  told  that  subscriptions  were  actually  collected  by  the  upland 
folk,  to  pay  the  fines  of  such  among  their  number  as  might  be  con- 
victed, and  generally  in  order  to  mature  and  carry  out  the  line  of 
defence  or  campaign  which  they  might  undertake  in  this  social 
warfare. 

This  process  was  apprenticeship,  a  practice  unknown  to  antiquity, 
and  apparently  not  accepted  in  all  the  countries  of  modern  Europe. 
This  expedient,  adopted,  I  do  not  doubt,  in  the  first  case,  from 
motives  of  police,  is  adversely  criticised  by  Adam  Smith,  who  holds 
that  it  raises  the  wages  of  the  persons  who  go  through  this  period 
of  deferred  wages.  He  also  believes  that  it  hinders  the  free  circu- 
lation of  labour,  because  it  disables  those  who  have  not  passed 
through  this  preliminary  training  from  undertaking  an  employment 
which  is,  so  to  speak,  fenced  against  them.  But  he  does  not  dwell 
long  on  its  effect  on  the  wages  of  labour,  for  it  is  open  to  doubt, 
whether  in  the  end  the  calling  which  is  necessarily  preceded  by 
apprenticeship  is  necessarily  better  remunerated  than  one  which  is 
not.  For  if  it  be  supposed  to  have  advantages,  due  to  the  post- 
ponement of  the  wage  earning  period,  either  the  remuneration 
when  the  wages  are  earned  owes  its  amount  to  the  delay  which  has 
been  interposed,  in  which  case  the  matter  is  in  equilibrio,  and  we 
must  search  further  for  the  effects,  as  it  stimulates  competition  for 
the  higher  earnings,  in  which  case  the  wages  are  depressed  by  an 
excess  of  supply,  or  the  employment  is  rendered  precarious,  and  the 
aggregate  earnings  are  equalized  by  breaks  in  the  occupation.  In 
reality,  however,  the  economical  significance  of  apprenticeship  is 


APPBENTICESHIPS.  801 

part  of  a  far  larger  question ;  the  particular  causes  which  raise  or 
depress  wages,  or  affect  the  value  of  that  which  the  workman  offers 
for  sale,  apart  from  the  general  laws  wliich  induce  high  and  low 
prices.  Let  us  first,  however,  look  at  the  history  of  apprentice- 
ship. 

There  can  be  no  doubt  that  the  origin  of  the  practise  is  to  be 
traced  to  the  motive  which  I  have  already  given,  a  desire  to  secure 
to  the  purchasers  of  trade  privileges  the  benefits  which  the  existing 
generation  and  their  predecessors  in  title  have  secured.  In  fact,  the 
practice  of  apprenticeship  long  precedes  any  statutable  enactment 
enforcing  it  on  craftsmen.  Early  intimations  of  it  are  given  by 
Madox,  and,  indeed,  the  indirect  adoption  of  the  system  in  the 
Hberal  professions  at  an  early  date  is  to  my  mind  proof  that  these  pro- 
fessions copied  the  existing  and  older  practice  of  artisans  and  trades- 
men. It  is,  I  think,  open  to  doubt  whether  all  craftsmen  were 
apprenticed  in  times  early  and  late.  The  existence  of  a  class  of 
masons  who  are  called  free,  or  master,  and  a  similar  order  among 
carpenters,  for  I  have  often  seen  them  thus  designated,  appears  to 
me  to  indicate  that  the  practi^  was  not  universal.  The  frequent 
attempt  made  in  the  Statute  Book  to  compel  apprenticeship  implies, 
I  conclude,  that  the  rule  was  frequently  disregarded.  Undoubtedly 
the  wages  of  artisans  are  higher  than  those  of  agricultural  labourers 
at  all  periods  in  English  history,  but  this  may  not  necessarily  be  due 
to  apprenticeship  ;  it  may  be  the  result  of  broken  or  uncertain 
emplo}'ment,  or  of  bye-industries. 

The  period  of  apprenticeship  was  almost  invariably  seven  years, 
perhaps  from  the  precedent  of  Jacob.  The  limit  of  time  was  occa- 
sionally fixed  by  statute  law,  the  regulation  in  the  professions  was 
a  bye-law  of  the  corporation  which  admitted  the  qualified  person 
at  the  end  of  his  training.  Thus,  originally,  seven  years  inter- 
posed between  the  student's  entry  at  an  inn  of  court  and  his  call- 
ing to  the  bar,  seven  years  were  demanded  for  the  training  of  the 
attorney,  seven  years'  study  for  admission  to  the  privileges  of  the 
University.  I  do  not  find  that  any  material  advantage  of  a  calcu- 
lable kind  was  presented  by  the  licensing  body  when  the  course 
was  over.  Up  to  the  end  of  the  seventeenth  century  the  earnings 
of  barristers  and  solicitors  as  attorneys  were  very  small,  and  the 
remuneration  of  a  clerk,  i.e.,  of  a  graduate,  was  no  better  than 


802  THE  GUILD  AND  APPBENTICE  SYSTEM. 

that  of  an  artisan.  Quite  apart  from  the  pressure  which  charac- 
terizes professions  in  later  times,  all  that  the  licensing  bodies  did 
was  to  give  the  privilege  of  pleading  to  the  barrister,  of  acting  as 
the  agent  of  another  to  the  attorney,  and  of  teaching  what  he  had 
himself  been  taught  to  the  graduate. 

One  of  three  motives  may  have  been  present  to  the  minds  of 
those  who  by  the  custom  of  their  calling  were  in  the  habit  of  im- 
posing the  prior  condition  of  apprenticeship  on  those  who  would  be 
their  fellows  in  the  future.  They  might  have  contemplated  the  ex- 
pediency of  making  those  who  entered  into  a  more  or  less  privileged 
order,  pay  for  the  privilege  to  which  they  succeeded.  They  might 
have  designed  to  narrow  the  field  of  competition  within  their  own 
calling,  by  putting  impediments  in  the  way  of  those  who  might  elect 
to  follow  it.  They  might  have  had  before  them  the  expediency  of 
maintaining  a  high  standard  of  proficiency  in  their  craft.  The 
economist  who  is  naturally  disposed  to  interpret  such  a  regulation 
from  the  point  of  view  which  marks  the  relation  of  wages  to  profits 
and  prices,  may  be  tempted  to  dwell  more  exclusively  on  the  second 
of  these  motives.  But  I  am  sure  that  the  firsthand  third  were  pre- 
sent to  the  minds  of  the  artisans  of  old  times.  Whether  the  second 
of  these  motives  was  a  successful  one,  and",  in  case  it  did  influence 
the  advocates  of  tlie  apprenticeship  system,  is  capable  of  being  sus- 
tained, is  to  be  determined  by  the  fact  of  what  the  apprenticed 
person  actually  earned. 

The  trade  of  early  England  was  not  only  small,  but  precarious. 
The  smallness  of  the  towns,  to  which  allusion  has  already  been 
made,  is  a  proof  of  this.  The  feeling,  therefore,  which  a  trader  or 
manufacturer  would  entertain  towards  his  company  and  its  members 
must  have  been  akin  to  that  which  in  later  times  was  felt  by  the 
licensees  of  regulated  companies  of  commerce.  It  is  not  just,  they 
would  argue,  that  they  who  create  and  insure  trade  at  considerable 
initial  expense  should  be  exposed  to  the  rivalry  of  those  who  are 
striving  to  enter  on  the  fruit  of  our  labours,  without  making  any 
contribution  towards  the  outlay  which  was  essential  to  the  existence 
of  the  trade  at  all.  Or  to  take  a  more  modern  parallel,  it  must 
have  been  like  the  feeling  which  an  artisan,  who  has  belonged  to  a 
trade  union  all  his  life,  who  has  made,  in  consequence,  continual 
sacrifices  for  it,  and  who  consequently  believes,  rightly  or  wrongly, 


HE  WAGES  OF  ABTISAN8,  808 

that  his  expenditure  has  raised  wages,  entertains  towards  another 
artisan,  who  will  make  no  sacrifices,  will  incur  no  unpopularity 
with  employers,  but  is  not  above  reaping  the  benefit  of  his  fellows* 
disinterested  action. 

It  is  quite  true  that  the  wages  of  first-rate  artisans  were  in  the 
Middle  Ages  50  per  cent,  above  those  of  agricultural  or  peasant 
labourers.  But  the  artisan  was  migratory  when  he  earned  so  much. 
The  common  mason  and  the  common  carpenter  got,  as  a  rule,  no 
more  for  their  labour  than  would  compensate  them  for  precarious 
or  broken  employment.  Now  a  migratory  artisan  was  put  to  much 
greater  cost  for  his  maintenance  than  a  labourer  would  be,  whode 
home  was  stationary.  This  was  discerned,  early  and  late,  by  the 
fact  that  workmen  who  were  pressed  for  the  king's  service,  no  un- 
common event,  were  always  provided,  in  addition  to  their  wages, 
with  journey  money.  Let  me  illustrate  my  position.  A  founder 
resolves  on  building  a  college  or  monastery,  and  the  former  was  not 
infrequently  founded  in  the  fifteenth  century.  Workmen  are  to  be 
got  from  all  quarters,  master  builders  and  master  carpenters  from 
remote  places.  Such  men  have  to  leave  their  homes  and  families, 
and  to  have  for  a  time,  in  their  humble  way,  a  double  establish- 
ment. It  is  impossible  to  conceive,  quite  apart  from  apprentice- 
ship, that  they  would  be  content  to  work  at  wages  which  did  not 
exceed  the  earnings  of  a  residential  workman,  upon  whom  no  extra 
charges  were  put,  or  if  such  a  remuneration  were  not  paid  them, 
that  a  constant  supply  of  artisans  would  be  forthcoming.  I  think 
that  these  are  sufficient  causes  for  the  comparative  elevation  of 
artisan's  wages,  without  having  recourse  to  the  theory  that  they 
were  designedly  raised  by  apprenticeship.  Further,  it  seems  to  me, 
that  the  far  greater  elevation  of  artisan's  wages  in  London  points 
to  analogous  facts.  There  was  much  more  expectation  of  work  in 
the  city,  but,  on  the  other  hand,  the  cost  of  living  was  much  higher 
than  in  the  country,  and  even  in  small  towns.  But  at  the  same  time 
I  can  assure  my  hearers  that  a  mason  in  Oxford  440  years  ago  was 
paid  relatively  better  wages  than  he  is  paid  in  London  for  a  fifty-six 
hours'  ^ToiPat  present.  The  fifteenth-century  workman  worked  for 
only  an  eight  hours  day. 

One  may  well  wish  that  one  could  recall  the  discussions  which 
took  place  at  **  the  chapters  and  congregations  of  masons  and  car- 


804  TEE  GUILD  AND  APPBENTICE  SYSTEM, 

penters  when  under  their  alliances  and  covines,  they  made  ordi- 
nances and  took  oaths,"  when  they  excited  the  wrath  of  Parliament 
in  1361,  the  year  of  the  second  plague.  It  was  the  time  at  which 
Decorated  architecture,  having  been  brought  to  perfection,  was  on 
the  eve  of  giving  way  to  the  more  florid  and  less  attractive  Perpen- 
dicular. The  greater  part  of  the  handsome  churches  and  conven- 
tual buildings  of  that  age  were  the  work  of  the  artisans  themselves, 
who  "could  draw  their  own  plot."  It  needed  no  common  or  brief 
training  to  enable  the  mason  to  himself  design  these  structures 
from  the  foundation  to  the  roof,  and  then  resign  his  work  to  an 
equally  skilful  carpenter.  These  working  men  were  the  teachers, 
the  models  of  those  architects  who  copy  their  labours  in  our  days, 
and  often  make  a  sad  bungle  of  the  imitation.  In  a  time  when  men 
could  not  be  spared  for  the  otiose  function  of  a  designer,  who  very 
often  knows  little  or  nothing  of  the  materials  with  which  he  has  to 
deal,  but  the  design  came  from  the  artisan,  we  may  depend  on  it, 
that  a  seven-years  apprenticeship  was  no  long  period  for  the  youth 
to  learn  his  craft  in,  and  become  the  rival  in  the  new  style  of 
these  great  builders  who  had  raised  the  structures  of  a  previous 
century. 

I  am  speaking,  you  will  observe,  of  the  work  of  artisans,  five 
centuries  ago.  A  study  of  the  conditions  under  which  they  lived 
and  worked,  many  of  their  works  being  still  before  us,  convinces 
me  that,  whatever  may  be  said  against  apprenticeship  in  time 
present,  it  was  a  necessary  condition  for  the  art  and  labour  of  the 
past.  It  is  quite  possible  that  a  practice  may  have  outlived  its 
usefulness,  and  though  there  was  a  time  when  it  was  requisite, 
that  time  has  been  followed  by  another,  when  it  has  become  super- 
fluous or  even  mischievous.  What  I  wish  you  to  notice  is,  that 
when  we  project  ourselves  into  a  bygone  age,  we  cannot  conclude 
invariably  with  those,  who,  however  far-sighted  and  shrewd  they 
are,  are  unable  to  realize,  from  lack  of  facts,  these  remote 
conditions.  It  is  a  common  and  a  dangerous  error  to  interpret  the 
past  by  the  present.  It  is  a  true  and  necessary  philosophy  to 
interpret  the  present  by  the  past,  and  I  have  some  satisfaction  in 
knowing,  that  whatever  be  the  worth  of  my  own  comment — ^judge 
it  as  you  will — I  have  provided  the  means  by  which  others  after 
me  will  be  able  to  realize  for  themselves  the  bygone,  but  by  no 


THE  PBOPEBTY  OF  THE  GUILDS.  306 

means  exhausted  conditions  of  past  industrial  life.  And  I  may 
mention  as  part  of  these  facts,  that  Acts  of  Parliament  not  infre- 
quently provide  for  the  apprenticeship  of  labourers  in  husbandry, 
meaning  by  this,  I  am  sure,  those  higher  agricultural  operations 
which  require  special  knack  and  acuteness,  and  formed  the 
qualifications  of  the  first-class  farm-hand,  whom  our  ancestors 
were  wont  to  describe  as  a  bailiff  in  husbandry,  who  directed  all 
operations,  and  could  do  everything  which  he  directed.  These 
apprenticeships.  Sir  John  Sinclair  informs  us,  survived  in  the 
West  to  the  present  century. 

I  must,  however,  say  a  little  here  about  the  guilds,  town  and 
country,  at  a  time  when  they  were  in  their  prime  and  were  actually 
the  institutions  which  they  proposed  to  be.  In  the  first  place,  they 
were  well-nigh  universal,  though  they  were  unchartered  and- 
informal.  Their  property  was  derived  from  grants  or  charges  on 
land  or  houses,  made  for  the  purpose  of  securing  the  continuance 
of  a  religious  office,  much  appreciated  and  exceedingly  common  in 
the  period  of  English  social  history,  which  precedes  the  Keforma- 
tion,  prayers  or  masses  for  the  dead.  From  what  I  have  seen  there 
was  scarcely  an  estate  on  which  some  such  liability  was  not 
created.  One  .college  in  Oxford,  Oriel,  was  much  engaged  in  the 
business  of  negotiating  the  price  at  which  masses  could  be  secured, 
and  the  register  of  the  College  contains  evidence  of  the  strictly 
commercial  character  of  these  negotiations,  the  College  fulfilling 
its  part  of  the  bargain  in  the  large  chancel,  large  for  this  special 
object,  of  St.  Mary's  Church.  Almost  all  the  house  property  in 
Oxford  possessed  by  the  pre-Eeformation  Colleges  is  due  to  this 
source,  the  bargain,  especially  when  the  mass  was  an  obit  or  a 
perpetual  ceremony,  being  that  the  land  or  tenement  was  conveyed 
to  the  contracting  party,  subject  to  this  obligation.  It  seems,  so 
thoroughly  was  the  custom  engrained  in  the  rehgioas  life  of  the 
English,  that  these  grants  for  definite  rehgious  offices  were  not 
liable  to  the  ordinary  law  of  mortmain.  To  have  refused  per- 
mission that  such  engagements  should  be  made  would  have  shocked 
the  sentiment  of  the  time  too  seriously.  In  the  New  College 
rental  of  Oxford  tenements,  six  such  payments  are  reserved  for 
divers  monasteries,  and  it  is  quite  certain  that  most  of  the  other 
property  was  held  under  similar  obhgations. 

21 


^^. 


806  THE  GUILD  AND  APFBENTICE  SYSTEM, 

Now  this  is  a  type  of  tlie  guild  lands  held  in  town  and  country 
by  chartered  or  unchartered  associations.  The  ancient  tenements, 
which  are  still  the  property  of  the  London  Companies,  were 
originally  burdened  with  masses  for  the  donors.  In  the  country, 
the  parochial  clergy,  or  the  migratory  clergy,  undertook  the  service 
of  these  chantries,  which  were  ranged  along  the  side  walls  of  the 
aisles  of  churches,  and  the  establishment  of  a  mass  or  chantry 
priest,  at  a  fixed  stipend,  in  a  church  with  which  he  had  no'other 
relation,  was  a  common  form  of  endowment.  The  residue,  if  any, 
of  the  revenue  derivable  from  these  tenements,  was  made  the 
common  property  of  the  guild,  and  as  the  continuity  of  the  service 
was  the  great  object  of  its  establishment,  the  donor,  like  the 
modern  trustee  of  a  life  income,  took  care  that  there  should  be  a 
surplus  from  the  foundation.  The  land  or  house  was  let,  and  the 
guild  consented  to  find  the  ministration  which  formed  the  motive 
of  the  grant.  Besides  these  sources  of  income,  the  nucleus  of 
very  substantial  advantages,  the  association  levied  small  fees  from 
the  members,  inflicted  fines  on  offending  members  of  the  guild, 
and  so  secured  a  common  purse. 

I  have  referred  to  this  at  some  length,  because  the  guild  lands 
ere  a  very  important  economical  fact  in  the  soci^a  condition  of 
early  England.  The  guilds  were  the  benefit  societies  of  the  time, 
from  which  impoverished  members  could  be  and  were  aided.  It 
was  an  age,  as  I  have  told  you,  in  which  the  keeping  of  accounts 
was  common  and  familiar.  Beyond  question,  the  treasurers  of  the 
village  guild  rendered  as  accurate  an  annual  statement  to  the 
members  of  the  fraternity,  as  a  bailiff  or  collector  did  to  the  lord. 
If  there  was  a  surplus  over  the  annual  expenditure,  it  went  to  the 
purposes  of  an  annual  or  more  frequent  feast.  The  banquets  of  the 
City  of  London  Companies,  now  enjoyed  by  persons  who  have  not 
the  remotest  connection  with  the  purposes  of  these  Companies, 
are  a  survival  of  mediseval  guild  life.  So  are  the  parish  feasts^ 
whose  origin  Blomfield  discovered  in  collecting  materials  for  his 
county  history  of  Norfolk,  whose  compulsory  impoverishment 
he  comments  on  with  some  indignation.  It  is  quite  certain 
that  the  town  and  country  guilds  obviated  pauperism  in  the 
Middle  Ages,  assisted  in  steadying  the  price  of  labour,  and 
formed  a  permanent  centre  for  those  associations  which  fulfilled 


COMBINATIONS  OF  WORKMEN,  807 

the  function,  that  in  more  recent  times  trade  unions  have  striven 
to  satisfy. 

It  is  not  a  little  remarkable  that  the  combinations  of  workmen 
for  the  purpose  of  bettering  their  condition,  such  combinations 
being  known  popularly  as  trade  unions,  though,  for  reasons  which 
I  shall  give,  I  prefer  to  call  them  labour  partnerships,  have 
attracted  so  little  attention  from  professed  economists.  Their 
ancient  history  had  long  been  lost,  and  has  only  recently  been 
re-discovered.  This  may  account  for  much.  In  Smith's  time, 
they  were  suppressed,  being  under  the  ban  of  the  law,  and  if  they 
subsisted  at  all,  existed  only  as  secret  societies.  When  Ricardo 
became  a  classic,  they  were  still  illegal,  and  the  literary  descendants 
of  Eicardo,  the  two  Mills,  father  and  son,  preserve  a  complete 
silence  on  this  organisation.  Mr.  Fawcett,  as  was  inevitable  in  a 
man  brought  face  to  face  with  practical  questions,  during  a  long 
Parliamentary  experience,  at  last  dealt  with  the  topic.  But  as  he 
had  a  very  scanty  array  of  statistical  facts,  his  account  is  not 
analytical,  and  is  far  from  being  exhaustive  or  satisfactory.  It  is 
very  hard  for  a  man,  who  has  gone  on  to  middle  age  in  the 
twilight,  to  accept  evidence  which  alters  his  impressions.  I  do 
not  say  this  ^|f  my  friend,  Mr.  Fawcett,  whose  mind,  to  the  last 
days  of  his  life,  too  early  ^closed,  was  singularly  receptive  of  new 
information. 

One,  out  of  the  calamities  which  afflict  political  economy,  is  the 
constantly  recurrent  phenomenon,  that  all  or  nearly  all  its  fallacies 
are  partially  true.  There  is  some  truth  in  the  mercantile  theory, 
in  the  balance  of  trade  theory,  in  the  protectionist  theory,  in  the 
Eicardian  theory  of  rent,  in  the  bimetallic  theory  of  currency,  in 
the  fair  trade  revival,  in  the  doctrine  of  reciprocal  liberty,  even  in 
the  Liberty  and  Property  Defence  League.  It  is  so  in  history.  There 
is  some  value  in  a  mere  arrangement  of  facts  in  chronological 
^* order,  without  any  indication  of  sequence  or  connection.  There  is 
some  value  in  what  is  called  constitutional  history,  i,e.^  the  dis- 
covery in  documents,  and  the  partial  analysis  of  the  machinery  of 
administration  and  legislation,  at  various  epochs  of  English 
history,  though  the  principle  or  practice  has  been  in  existence, 
certainly  for  some  time,  possibly  for  a  long  time,  before  its  activity 
is  announced,  as  the  record  in  which  the  fact  is  preserved  was 


3 


808  TEE  GUILD  AND  APPBENTICE  SYSTEM, 

composed,  when  a  multitude  of  analogous  records  have  perished. 
There  is  some  value  in  what  is  called  the  philosophy  of  history, 
i.e.,  the  analysis  of  the  motives  which  have  influenced  considerable 
persons,  and  of  the  power  such  persons  have  had  in  moulding  the 
destiny  of  nations,  though  here  a  pernicious  habit  of  paradox  has 
been  indulged,  under  which,  for  instance,  Henry  VIII.  is  made  to 
appear  a  patriot  king;  Elizabeth,  a  capricious  woman  without  a 
policy  ;  Mary  Stuart,  a  virtuous  and  ill-used  princess ;  and  so  on, 
through  the  ages.  Of  course  these  whims  have  no  vitality  beyond 
the  popularity  of  the  writer,  but  they  are  immeasurably  wearisome. 
I  hope  that  I  may,  in  the  course  of  such  lectures  as  these,  deal 
with  most  of  these  half-truths  in  political  economy,  and  unless  I 
am  mistaken,  I  shall  incidentally  show,  out  of  solid  and  unmis- 
takable economical  facts,  how  baseless  are  many  of  the  conclusions 
which  pass  current  as  constitutional  principles,  or  historical 
philosophy. 

Now,  the  particular  half-truth  which  arrested  Mill  in  his  analysis 
of  the  labour  question,  quite  apart  from  the  total  ignorance  under 
which  he  suffered  in  reference  to  the  history  of  labour  and  wages, 
was  the  wage  fund  theory.  This,  like  the  law  of  diminishing 
returns,  is,  as  I  have  told  you,  the  transference  of  a  theoretical 
hypothesis  into  the  sphere  of  an  actual  condition  of  fact,  and 
thence  to  an  economical  law.  It  is  quite  true  that  in  theory,  and 
at  a  given  point  of  time,  could  we  conceive  that  the  industrial 
machine  was  in  equilihrio^  the  amount  of  capital  destined  to 
reimburse  the  workman  for  the  labour  which  he  has  advanced,  or 
lent  to  the  employer,  is  an  exact  quantity.  Now,  Mill  thought  that 
this  theoretical  quantity  was,  in  the  ceaseless  activity  of  human 
industry,  an  actual  quantity,  that  it  was  inelastic  and  incapable 
of  increase,  not  only  at  an  incommensurable  point,  but  in  a 
measurable  space  of  time.  This  is  the  meaning  of  his  celebrated 
paradox,  for  it  is  no  better,  that  demand  for  commodities  is  not  a^ 
demand  for  labour,  a  position  on  which  he  insists  with  unwonted 
pertinacity,  I  had  almost  said,  passion.  I  have  already  pointed  out 
to  you  that  a  demand  for  commodities  is  a  demand  for  labour,  that 
even  the  comparative  slackness  of  demand  for  commodities,  by  no 
means  involves  a  slackness  in  the  demand  for  labour,  and  that  the 
manner  in  which  an  urgent  demand  for  commodities  is  met,  is  by 


MB.  MILL'S  WAGE  FUND.  809 

turning  wealth  from  its  passive  condition  as  an  accumiilation  into 
its  active  condition  as  capital,  loanable  by  the  employer  or  self- 
supplied.  I  could  easily  anticipate  the  satisfaction  with  which 
many  persons  engaged  in  production  would  respond  to  the  demand 
for  commodities,  and  the  rapidity  with  which  the  demand  for  labour 
would  arise. 

But,  as  Mill  had  committed  himself  to  endorsing  the  fallacy  of 
the  wage  fund,  he  was  driven  to  certain  logical  inferences  from  it. 
If  the  sum  destined  for  the  wages  of  labour  was  an  inexorably  fixed 
quantity,  incapable  of  accretion  by  any  human  means,  it  follows 
that  a  demand  for  commodities  only  means  the  diversion  of  labour 
from  one  to  another  calling ;  one  of  the  curious  delusions  which 
political  economists  fall  into  when,  having  derived  their  notions  of 
capital  from  bankers'  balances,  they  assume  an  equal  mobility  for 
all  industrial  agencies.  Does,  however,  any  man  of  practical  expe- 
rience imagine  that  an  urgent  demand  for  cotton  cloth  will  draw 
on  the  reserve  of  agricultural  labour,  or  that  if,  for  example,  more 
persons  are  employed,  or  the  same  persons  employed  more  con- 
tinuously in  weaving  cotton,  this  will  have  any  effect  whatever  on 
the  employment  or  wages  of  farm  hands  ?  But,  to  be  even  partially 
true,  the  wage  fund  theory  would  require  that  each  calling  should 
have  its  own  wage  fund,  on  which  the  wage  fund  of  other  callings 
cannot  trench.  If,  however,  each  calling  has  its  own  separate  wage 
fund,  the  demand  for  the  commodities  produced  by  that  calling  wiU 
inevitably  create  a  demand  for  labour,  by  which  commodities  can 
alone  be  supplied,  the  addition  of  capital,  provided  it  be  forth- 
coming, as  it  always  is  in  saving  or  settled  countries,  and  the 
transference  of  a  part  of  the  fund  of  passive  wealth  into  the  agency 
of  active  wealth.  ^I  venture  upon  saying  that,  if  I  were  to  ask  any 
practical  man  of  business,  in  any  of  our  great  or,  for  the  matter  of 
that,  small  centres  of  industry,  as  to  the  process  by  which  an  ex- 
ceptional demand  would  be  met,  he  would  tell  me  that  I  had  put 
into  words  the  result  of  his  experiences. 

Now  the  consequence  of  Mr.  Mill's  theory,  at  present,  I  believe, 
dropped  by  the  economists  of  his  school,  is,  that  if  any  combination 
of  workmen  succeed  under  any  circumstances,  under  which  there  is 
an  urgent  demand  for  their  labour,  in  getting  better  wages  for  their 
work,  or  even  in  case  they  get  these  higher  wages  by  the  sponta- 


810  THE  GUILD  AND  APPBENTICE  SYSTEM. 

neous  offers  of  competing  employers,  they  are,  by  bettering  their 
own  lot,  worsening  the  lot  of  other  labourers,  whose  share  in  the 
fixed  quantity  is  pro  tanto  diminished.  The  doctrine  of  the  wage 
fund,  enforced  by  the  high  authority  and  the  sterling  character  of 
Mr.  Mill,  has  been  made  a  perpetual  weapon  of  attack  against  the 
labour  partnerships  of  working  men.  These  men  have  been  in- 
formed, very  superfluously,  because  very  erroneously,  that  the  efforts 
which  they  are  making  to  better  their  condition  are  against  the 
laws  of  political  economy,  and  are  assured,  as  they  are  assured 
under  the  Eicardian  law  of  rent,  that  the  wages  of  labour  are  low 
and  inelastic  by  a  natural,  or  even  providential,  arrangement.  It 
is  no  wonder  that  they  resent  such  interested  nonsense.  It  is  to  be 
regretted  that  they  are  apt  to  repudiate  economic  science  altogether, 
and  even  utter :  **  If  political  economy  is  against  us,  we  are  against 
political  economy." 

The  ordinary  teaching  of  political  economy  admits  that  all  wealth 
is  produced  by  labour,  but  it  rarely  tries  to  point  out  how  one  of 
the  producers  can  secure  the  benefit  of  his  own  product.  It  treats 
of  the  manner  in  which  wealth  is  originated,  but  it  generally  post- 
pones the  analysis  of  the  process  by  which  it  is  distributed.  It  is 
attracted  mainly  by  the  agencies  under  which  wealth  is  accumu- 
lated, as  gP  general  does  military  force,  and  it  is  more  concerned 
with  its  concentration  than  it  is  with  the  process  of  its  partition. 
Most  writers  on  political  economy  have  been  persons  in  easy  cir- 
cumstances, or  have  been  intimates  of  those  who  are  in  easy  cir- 
cumstances. They  have  witnessed,  with  interested  or  sympathetic 
satisfaction,  the  growth  of  wealth  in  the  class  to  which  they  belong, 
or  with  which  they  have  been  familiar.  In  their  eyes  the  poverty 
of  industry  has  been  a  puzzle,  a  nuisance,  a  problem,  a  social  crime. 
They  have  every  sympathy  with  the  man  who  wins  and  saves,  no 
matter  how,  but  they  have  not  been  very  considerate  for  the  man 
who  works.  They  lecture  the  poor  on  their  improvidence,  their  reck- 
lessness, on  the  waste  of  their  habits.  But  I  have  never  read  any 
of  their  works  in  which  they  have  raised  the  question  as  to  whether 
these  traits  in  the  character  of  workmen,  assuming  them  to  be  true, 
are  not  historically  traceable  to  some  manipulation  of  the  processes 
by  which  wealth  is  distributed,  processes  which  they  candidly  and 
truly  inform  you  are  of  human  institution  only. 


ASSOCIATIONS  OF  CAPITAL  OB  OF  LABOUB.         311 

Now  I  am  one  of  those  persons  who  beh'eve  that,  on  the 
hypothesis  of  perfect  freedom  in  all  innocent  action,  the  agency 
of  the  State  should  be  limited  to  the  protection  of  the  weak  against 
the  strong,  and  I  have  never,  in  vote  or  speech,  swerved  from  that 
principle.  As  I  deprecate  the  unnecessary  interference  of  the  State 
on  behalf  of  the  workman,  so  I  deprecate  the  action  of  the  State  in 
permitting  restricted  devises,  remainders,  or  reversions  to  the  re- 
puted heads  of  private  families.  But  if  the  law  permits  or  sanctions 
anti-social  privilege,  the  community  must  expect  a  socialist  propa- 
ganda. If,  by  its  enactments,  the  State  permits  people  to  be  pro- 
tected against  the  corisenjience  of  their  own  vices  in  one  class  of 
life  by  the  mechanism  of  settlements,  it  must  not  wonder  at  another 
class  demanding  an  eight-hours  day  from  the  legislature,  or  at  some 
people  talking  loosely  about  the  nationalization  of  land.  One  eco- 
nomic fallacy,  if  it  be  discerned  that  it  is  conceded  to  in  order  to 
subserve  a  special  interest,  is  sure  to  beget  another,  which  would, 
if  it  could,  and  may  perhaps  hereafter,  deal  unfairly  with  that  pro- 
tected or  bolstered  interest.  In  the  fifteenth  century  workmen  had 
an  eight-hours  day,  probably  by  their  own  concerted  action,  assu- 
redly to  the  advantage  of  employers.  I  hope  hereafter  to  state  what 
is,  in  my  opinion,  the  economic  defence  of  a  restraint  on  laksezfaire 
in  some  directions. 

When  men  put  their  capitals  together  in  any  direction,  neither 
society  nor  political  economists  have  a  word  to  say  against  them. 
The  defence  of  such  associations  is  obvious,  their  utility  unquestion- 
able, their  necessity  in  some  cases  indisputable.  No  fortune,  how- 
ever vast,  could  have  constructed  the  North- Western  Eailway,  the 
Suez  Canal,  or  even  a  fleet  of  ocean-going  steam-vessels.  These 
are  undertakings  the  risks  of  which  would  be  too  great  for  private 
capital,  the  profits  too  remote,  even  if  the  individual  could  supply 
the  funds.  The  bias  of  the  present  age  is  continually  towards  the 
joint-stock  principle,  i.e.,  the  aggregation  of  small  capitals  into 
industrial  avocations.  There  is  no  little  reason  to  believe  that  the 
development  of  this  tendency  has  had  a  considerable  effect  on  the 
depression  of  prices,  because  people  interpret  the  profits  of  capital 
by  the  cost  of  acquiring  that  from  which  their  profit  is  derived,  not 
by  the  accumulated  cost  of  that  which  they  have  purchased.  Very 
possibly,  the  business  or  undertaking  which  has  been  turned  into  a 


812  THE  GUILD  AND  APPBENTICE  SYSTEM. 

joint-stock  enterprise  is  weighted  at  its  inception  by  an  excessive 
price.  In  course  of  time  it  is  found  to  be  unworkable  at  that 
price,  and  the  undertaking  is  wound  up,  and  reconstructed  with  a 
diminished  capital.  This  process  may  go  on  again,  till  the  ultimate 
possessors  have  procured  it  at  far  less  than  its  intrinsic  value. 
Under  such  circumstances,  as  prices  are  modified  by  the  competition 
of  capitalists,  the  undertaking  of  the  same  kind  which  has  not 
undergone  this  process  is  at  a  disadvantage  in  the  competition 
against  that  which  has,  and  can  therefore  afford  to  undersell.  It 
is  true,  underselling  does  not  tend  to  go  further  than  is  necessary 
in  order  to  get  a  sound  footing,  and  to  displace  rivals  ;  but,  as  com- 
petition increases  and  becomes  sharper,  the  process  by  which  the 
footing  is  gained  and  rivals  are  displaced  is  more  prolonged  and 
more  costly.  But  it  is  plain  that  the  agency  whose  capital  is  small 
in  proportion  to  its  expected  or  possible  profits  is  at  an  advantage 
in  the  struggle. 

But  in  the  experience  of  life,  and  under  the  traditions  of  society, 
if  in  a  commercial  undertaking,  the  capital  of  which  is  collected  by 
these  small  contributions,  the  business  is  carried  on  with  integrity, 
or,  at  least,  with  success,  if  demand  is  interpreted  clearly,  and 
supply  is  regulated  shrewdly,  so  as  to  secure  the  largest  possible 
profit  to  the  undertakers,  to  use  Smith's  excellent  word,  not  only  is 
the  business  welcomed  as  legitimate,  but  the  managers  or  agents  of 
it  are  applauded.  If  it  be  greatly  successful,  the  promoters  are  de- 
scribed, by  no  purposed  adulation,  as  merchant  princes,  pioneers  of 
industry,  creators  of  public  wealth,  benefactors  of  their  country, 
and  guarantors  of  its  permanent  progress.  They  are  presumed  to 
be  peculiarly  fit  for  offices  and  titles  of  honour,  to  merit  places  in 
Parliament,  occasionally  to  be  even  qualified  for  the  transmission 
of  hereditary  fortune,  rank,  and  authority.  It  may  be  discovered 
(3n  analysis  that-  they  have  made  no  wealth,  but  have  simply 
gotten  it,  or  that  their  profits  are  extorted  from  the  small  earnings 
and  the  prolonged  labours  of  the  downtrodden  and  helpless.  What 
matter  ?  the  wealth  is  won,  and  they  who  witness  the  riches  which 
have  been  acquired  take  no  thought  of  the  process  by  which  they 
have  been  aggregated.  Perhaps  it  is  impossible  and  unjust  to  blame 
that  which  society  permits,  or,  it  may  be,  cannot  of  its  own  force 
prevent.     For  if  the  State  guarantees  employment  and  wages,  it 


THE  TBADE  UNION  A  PARTNERSHIP.  813 

can  be  only  to  some  applicants,  and  to  these,  so  far  Mill  is  right, 
it  will  give  employment  and  wages  at  the  cost  of  others,  for  the 
State  has  no  means  of  its  own,  and  must  get  its  funds  by  taxation 
or  loan.  But  a  loan  is  only  deferred  and  disguised  taxation.  If  all 
men  who  are  ready  to  work  are  to  be  provided  with  occupation  by 
the  State,  you  must  not  only  get  it  for  carpenters  and  masons, 
peasants  and  unskilled  labourers,  but  cUents  for  a  lawyer,  patients 
for  a  doctor,  and,  vox  horrenda,  a  congregation  for  a  preacher. 
There  was  a  time,  between  1558  and  1688,  when  the  last  provision 
was  thought  to  be  the  province  of  the  State,  but,  at  the  latter  date, 
the  State  became  wiser  or  more  considerate,  and  passed  a  Toleration 
Act.  ___^^ 

Now  in  a  trade  union  or  labour  partnership  the  workmen  5o  pre-  I   . 

cisely  that  which  the  promoters  of  joint-stock  enterprise  undertake.        - — -^ 
The  latter  are  individually  too  poor  for  the  enterprise ;  collectively 
they  are  rich  enough.  They  are  too  weak  alone ;  they  are  strong  enough 
in  union  or  combination.   The  sacrifice  of  the  present  to  the  future,  * 

however  assured  the  future  may  be,  is  too  serious  for  the  individual,  | 

it  is  obvious  to  the  corporation.  The  association  may  be  called  into 
being  in  order  to  perform  a  great  service.  Perhaps  no  greater  ser- 
vice was  ever  performed  by  a  joint-stock  company  than  that  of  the 
Bank  of  England  to  England  and  the  nation  in  1694  and  1695. 
The  richest  patriot  would  have  shrunk  from  the  self-devotion  which 
was  necessary  in  that  eventful  year,  when  the  capture  of  Namur 
gave  promise  that  the  English  might  be  on  land  what  they  had  two 
years  before  showed  themselves  on  sea  at  La  Hogue. 

The  workman  has  only  one  thing  to  sell,  the  skill  of  his  hands. 
This  commodity,  to  use  economic  terms,  is  exceedingly  perishable. 
If  it  be  unsupported  by  its  necessary  supply,  it  rapidly  deteriorates. 
Labour,  unhke  other  finished  articles  in  demand,  cannot  be  kept 
out  of  the  market  without  prodigious  loss  to  the  owner.  Fortu- 
nately for  the  possessor,  could  he  only  make  a  universal  joint-stock 
company  comprising  the  capitals  of  all  workmen  within  the  same  ^o> 

craft,  his  existence  and  work  is  so  necessary  that  he  could,  on  the    *  j^  ^'    ^ 
hypothesis  given  above,  dictate  his  own  price  to  his  employer.  \ELQ^\yj^ 
will  never  claim,  to  be  sure,  a  price  which  will  destroy  his  employ-  ^-^      Jj^ 
ment  by  destroying  his  employer's  remuneration.}  The  mere  fact    ^ 
that  he  could  diminish  this,  and  perhaps  prevent  the  growth  of 


314  THE  GUILD  AND  APPBENTICE  SYSTEM. 

rent,  is  the  key  to  the  prolonged  struggle  which  I  have  often 
referred  to,  in  which  the  workmen  were  for  two  centuries  a 
victorious,  and  for  three  a  defeated,  class.  The  combination  which 
in  capital  was  considered  beneficent,  in  labour  was  treated  as 
felony,  and  even  when  the  felony  was  extinguished  by  abrogating 
the  labour  statutes,  was  left  to  the  elastic  interpretation  of  the 
common  law  doctrine  of  conspiracy,  if  there  be  a  common  law 
doctrine  of  anything.  , , 

I  Up  to  1825,  all  labour  partnerships  were  proscribed.     Now  it 

'"^  would  not  be  in  human  nature,  that  action,  which  had  been 
passionately  suppressed  for  centuries,  should  not  be  conceived  of 
immense  importance  to  those  who  had  suddenly  recovered  the 
liberty  of  association.  The  concession  of  free  action  is  a  great 
acquisition,  even  if  people  are  puzzled  with  the  unaccustomed 
boon,  and  make  an  unprofitable  and  erroneous,  perhaps  even  a 
criminal,  use  of  it.  The  blame  of  so  ill  a  use  lies  much  more  at 
the  door  of  those  who  have,  for  their  own  ends,  refused  the  liberty 
of  spontaneous  action  than  it  does  at  the  door  of  those  who  abuse 
what  they  have  recovered.  The  natural  inclination  to  exaggerate 
the  importance  of  what  they  had  won,  was  heightened  in  the  work- 
man's mind  by  the  new  steps  which  were  taken  to  indirectly  annul 
the  gift,  by  bringing  these  associations  under  the  law  of  conspiracy, 
by  refusing  to  allow  their  partnerships  the  protection  accorded  to 
benefit  societies,  and  by  permitting  the  secretaries  of  such  associa- 
tions to  embezzle  their  funds  with  impunity.  Even  now  the  move- 
ment, instead  of  being  welcomed,  as  a  virtual  exposition  of  the 
joint -stock  principle  as  applied  to  labour,  and  therefore  as  just  and 
as  innocent  as  any  analogous  institution  among  capitnlists  for  the 
furthej*ance  of  manufacture  and  trade,  is  looked  on  with  suspicion 
and  dislike,  constantly  misrepresented,  and  as  far  as  possible 
thwarted. 

Every  calling,  especially  those  which  are  professional,  always  has 
its  own  code  of  honour.  There  are  offences  against  the  unwritten 
code  of  these  callings  which  are  punished  by  the  members  of  these 
callings  with  the  connivance,  perhaps  with  the  approval  of  the 
public.  Is  that  wrong  per  se  in  working  men  which  is  right  in 
medical  and  legal  practitioners  ?  If  a  physician  or  surgeon  is  guilty 
of  unprofessional  conduct,  his  fellows  decline  to  serve  with  him,  as 


THE  EMANCIPATION  OF  TBADE  UNJ0N8.  815 

far  as  possible  exclude  him  from  their  society,  or  even  exclude  him 
from  practice.  Misconduct  at  the  bar  is  occasionally  punished 
with  a  formal  deprivation  of  a  barrister's  privilege.  It  is  possible 
that  the  reference  of  a  solicitor's  conduct  to  the  Incorporated  Law 
Society's  action  has  not  been  a  complete  success,  and  that  it  would 
be  better  superseded  by  a  court  of  honour  which  should  take  cogni- 
zance of  misconduct  which  now  passes  unchallenged.  I  see  no 
reason  why  a  similar  rule  of  action  should  not  be  adopted  by  arti- 
sans, and  acknowledged  by  employers.  It  might  make  better  and 
more  trustworthy  workmen ;  for  the  machinery  of  such  a  censorship 
would  certainly  increase  the  self-respect  of  those  who  were  sub- 
jected to  it. 

The  machinery  of  a  strike,  the  war  of  the  workmen,  is  seldom 
successful.  It  is  generally  adopted  at  the  least  advantageous  time, 
that  in  which  the  demand  for  labour  is  diminishing,  and  therefore, 
when  the  workman  is  most  in  the  power  of  the  employer.  But 
this  cannot  be  made  a  reproach  to  the  workman.  It  rather  implies 
that  he  does  not  make  use  of  his  lost  opportunity,  a  strike  in  the 
midst  of  a  rising  market.  The  workman  appears  to  let  the  market 
do  its  own  work  when  the  demand  is  in  his  favour,  and  when 
profits  are  exceptionally  high,  to  look  for  only  a  small  part  of  the 
increased  advantage.  Of  course  when  he  does  get  exceptional 
wages  in  a  time  of  exceptional  profits,  calumny  is  busy  about  him, 
and  grotesque  fables  are  circulated  about  the  way  in  which  he 
expends  his  enhanced  earnings.  If  the  men  were  unforgiving  they 
would  treasure  up  the  memory  of  these  libels. 

In  recent  times,  intelligent  employers  have  begun  to  see  that 
what  economists,  who  understand  facts,  defend  as  the  right  o^  the 
workmen,  has  its  advantages  from  the  point  of  view  of  the  cictster. 
The  practice  adopted  in  many  trades,  where  a  unit  of  value  can 
be  easily  taken  and  understood,  is  to  make  that  unit  the  basis  of 
a  sliding  scale.  I  have  been  told  by  persons  engaged  in  the  iron 
trades  that  the  system  of  a  sliding  scale  works  well.  I  can  well 
believe  it,  because  it  assists  in  settling  what  is  always  of  interest 
to  the  producer,  the  anticipation  of  price.  As  I  have  often  stated, 
the  anticipation  of  a  price  is  the  problem  before  the  capitaHst 
producer,  the  regulation  of  market  values,  the  one  desideratum  of 
those  who  engage  in  productive  industry.     Besides,  the  profits  of 


316  THE  GUILD  AND  APPBENTICE  SYSTEM. 

the  capitalist  and  the  remimeration  of  the  labourer  are  both  forms 
of  wages,  the  question  between  the  two  being  merely  a  settlement 
as  to  the  share  due  to  each.  I  tried,  of  course  in  vain,  to  introduce 
the  principle  into  the  Irish  Land  Act  of  1881. 

Mr.  Mill  was  in  error  when  he  believed  that  an  increase  of  wages 
can  only  be  procured  at  the  expense  of  profit^,'  an  error  the  more 
remarkable,  when  one  remembers  that  he  detected  or  endorsed  the 
economical  principle  tbat  high  wages  did  not  necessarily  mean  dear 
labour,  or  low  wai:jes  cheap  labour.  No  doubt  if  higher  wages  were 
paid  while  the  efficiency  of  the  labour  is  not  increased  there  would 
be  an  immediate  and  apparent  loss  to  the  employer.  But  it  may  be 
recouped  out  of  rent,  which  may  diminish,  or  it  may  be  refunded 
by  the  consumer.  The  latter  condition  of  things  prevailed  during 
the  first  half  of  the  seventeenth  century,  as  I  have  shown  you. 
But  in  the  last  half,  when  the  wages  of  labour  rose  50  per 
cent.,  wages  did  not  suffer  nor  profits  either.  If  the  labour  becomes 
more  efficient,  it  is  certain  that  the  enhanced  advantage  will 
remain  with  the  employer  long  before  it  reaches  the  workman.  So 
it  was  in  the  first  half  of  the  eighteenth  century,  when  profits  were 
high,  prices  low,  and  labour  wages  were  very  slightly  altered. 

The  full  concession  of  freedom  in  the  formation  of  labour  part- 
nerships is  a  remedy,  and  one  of  the  best  remedies  against  those 
socialist  movements  which  demand  the  intervention  of  Parliament 
on  behalf  of  the  labourers'  employment.  In  countries  where  the 
Government  manages  its  subjects  too  much,  socialism  in  a  more 
or  less  menacing  form  prevails.  There  are  ominous  signs  that  in 
countries  where  protectionist  theories  are  adopted,  there  is  spring- 
ing up  a  movement  under  which  the  immigration  of  labour,  how- 
ever sparsely  peopled  the  country  may  be,  is  threatened  with 
regulation  or  even  prohibition.  This  is  the  talk  m  the  United 
States,  and  in  the  Australian  colonies.  It  seems  that  the  predic- 
tions and  pledges  of  protectionist  statesmen  have  been  falsified  by 
facts.  Wages  have  not  increased  so  rapidly  as  profits.  The  rich 
are  getting  richer,  the  poor  poorer.  (  Again  and  again  it  has  been 
proved  that  high  prices  do  not  make  high  wages.  But  in  England, 
though  here  there  is  just  cause  for  discontent,  the  doctrine  that 
the  State  should  find  employment  and  fix  wages  has  made  but 
little  way.     In  England  no  producer  is  assisted  to  a  price,  and 


THE  TBADE  UNION  A  REMEDY  AGAINST  SOCIALISM.   317 

therefore  no  workman  has  a  plea  that  he  himself  should  be.  Be- 
sides, there  is  a  widespread  belief  that  workmen,  if  the  whole 
order  had  only  public  spirit  and  would  consent  to  combined  action, 
coupled  with  prudent  counsel,  have  their  fortunes  very  much  in 
their  own  hands.  Only  they  feel  that  it  is  not  a  Httle  hard  that  the 
best  of  their  order  have  borne  the  brunt  of  the  struggle,  while  others 
whom  they  have  materially  assisted,  refuse  to  enter  into  the  asso- 
ciation, and  take  unfair  advantage.  The  utmost,  however,  that 
they  would  see  restored  is  the  system  of  apprenticeship,  and  the 
excuse  that  they  make  for  this  demand,  is  not  that  it  will  assist  in 
raising  the  rate  of  wages,  but  that  it  will  secure  the  efficiency  of 
the  workman. 


XV. 

THE  BISE  AND  PBOGRESS  OF  THE  COLONIAL  TRADE. 

Early  English  commerce — The  discoveries  of  Portugal  and  Spain — 
The  English  buccaneers — The  American  'plantations — The  sole- 
marlcet  theory — Wars  of  conquest,  of  religion,  of  trade — The  Irish 
manufactures — The  colonial  system — The  duties  on  colonial  timber 
and  sugar — Enumerated  and  unenumerated  goods — The  doctrine 
of  the  flag — Colonies  of  conquest  and  of  settlement — Canada  and 
the  Cape — The  surrender  to  the  colonists — The  tie  which  binds  the 
Colonies — Loans  by  Great  Britain. 

I  POINTED  out  to  you,  in  an  earlier  lecture,  that  the  English  nation 
was  not  for  many  years,  not  for  many  centuries,  an  inventive  -^ 
people,  and  that  it  was  slow  to  adopt  the  discoveries  of  other  nations. 
I  sought  to  show  you,  what  in  my  judgment  was  the  original  cause 
of  this  singular  backwardness,  and  what  were  the  causes  which 
brought  about  the  surprising  and,  apparently,  enduring  energy  of 
the  eighteenth  century.  And  though,  in  the  judgment  of  all  those 
whose  judgment  is  worth  anything,  the  policy  which  created  the 
opportunity  was  an  erroneous  one,  and  was  certain  to  bear  its  own 
Nemesis  with  it,  it  is  the  duty  of  the  historical  economist,  to  tako 
measure  of  facts  which  have  had  their  effect  on  the  destinies  of 
nations.  I  do  not  imagine  that  the  elder  Pitt  thought  much  of  the 
effect  which  would  be  induced  on  the  industrial  capacity  of  the 
English  when  he  entered  on  the  Seven  Years'  War,  and  saw  realized 
his  dream  of  a  mercantile  empire  at  its  conclusion,  or  anticipated 
that  the  very  efforts  which  he  had  made  would  assuredly  be, 
whether  the  English  Government  were  foolish  or  neutral,  the 
stimulus  to  colonial  independence.      In  the  same  way  the  Govern- 


EABLY  ENGLISH  COMMEBCE.  819 

ment  of  Louis  XVI.,  in  their  anxiety  to  retaliate  on  the  English 
people,  for  the  sacrifices  which  they  had  to  make  at  the  Peace  of 
Paris,  never  dreamed  that  when  they  were  assisting  the  American 
plantations  to  independence,  they  were  making  the  French  revolu- 
tion an  inevitable  consequence,  and  with  it  the  destruction  of  the 
ancient  monarchy  a  proximate  result. 

As  the  English  were  slow  to  invent,  so  they  were  slow  in 
maritime  enterprise.  Their  kings  had  for  near  four  centuries, 
considerable  transmarine  possessions,  and  these  possessions  were 
lost,  recovered,  lost  again,  recovered  again,  and  finally  passed  away 
from  them  with  great  facility.  Other  peoples  and  other  kings  have 
held  distant  possessions  for  much  longer  periods.  The  inheritance 
of  the  house  of  Burgundy  remained  with  the  elder  branch  of  the 
house  of  Austria  from  the  last  quarter  of  the  fifteenth  century  to  the 
first  quarter  of  the  eighteenth,  and  with  the  younger  branch  from 
that  date  till  a  century  later.  In  conquests,  the  English  seemed 
destined  to  win,  but  unable  to  keep.  The  explanation  of  this  is 
to  be  found  in  the  traits  of  the  English  political  character,  on 
which  indeed  I  have  very  decided  opinions.  But  they  are  not 
economical,  and  I  will  not  detain  you  with  a  dissertation  oji  our 
national  characteristics. 

In  commerce,  as  I  have  already  said,  for  many  centuries,  the 
mercantile  marine  of  the  English,  though  considerable  enough  to 
excite  the  envy,  and  stir  the  gall  of  our  neighbours,  was  by  no 
means  venturesome.  The  account  given  of  it  at  the  beginning  of 
the  fifteenth  century  confines  it  to  the  Baltic  and  the  French  coast  as 
far  as  Bayonne,  though  some  ships  may  have  coasted  Biscay,  and 
even  reached  Lisbon.  In  the  middle  of  the  century  it  seems  that 
the  limits  of  its  trade  were  not  extended,  for  the  French  critic 
notes,  after  charging  the  English  with  piracy  in  the  narrow  seas, 
that  with  all  their  marine  they  were  not  at  the  pains  to  put  down 
the  Barbary  and  Algerine  pirates.  Only  two  capital  discoveries 
were  made  by  the  English  in  the  fifteenth  century.  At  the  com- 
mencement of  it,  the  Bristol  merchants,  by  the  aid  of  the  mariner's 
compass,  reached  Iceland  by  the  eastern  route  ;  at  the  end  of  it 
another  Bristol  adventurer  discovered  Newfoundland.  But  we  hear 
nothing  more  of  the  former  exploit,  and  we  know  that  no  results 
ensued  from  the  discovery  of  Sebastian  Cabot  in  1497.    In  the  reign 


320    BISE  AND  PBOGBESS  OF  THE  COLONIAL  TBADE. 

of  Henry  VIII.,  as  we  learn  from  a  statute  regulating  the  cost  of 
freight,  English  vessels  ventured  a  little  farther,  to  the  crane  of 
Seville.  But  they  did  not  enter  the  Mediterranean,  or  give  any 
•  presage  whatever  of  that  bold  maritime  enterprise  which  was  to 
characterize  them  in  the  latter  part  of  the  sixteenth  century.  Till 
the  time  of  the  great  captains  or  buccaneers  of  Elizabeth's  reign, 
their  only  new  venture  was  the  unlucky  voyage  of  Willoughby 
round  the  coast  of  Norway  and  Sweden,  when  one  ship  reached 
Archangel. 

But  during  this  period  of  strange  inaction  or  hesitancy,  great 
discoveries  were  made.  Long  before  the  Bulls  of  Borgia  were 
granted  to  Portugal  and  Castille,  Prince  Henry  of  Portugal  had  dis- 
covered the  Canary  and  Cape  Yerd  islands,  and  had  coasted  along 
the  north-western  shore  of  Africa.  The  spirit  of  enterprise  was 
kept  up  by  Portugal  through  the  fifteenth  century,  at  the  conclusion 
of  which,  in  1497,  the  Cape  was  doubled,  and  the  foundation  was 
begun  of  the  Portuguese  settlements  in  Asia,  both  on  the  Indian 
Peninsula  and  in  the  Eastern  Archipelago.  Spain  discovered  the 
New  World  and  speedily  got  possession  of  Central  America,  and 
the  Pacific  coast  of  the  Andes.  While  English  voyagers  had  hardly 
trusted  themselves  out  of  sight  of  land,  other  nations  had  crossed 
the  oceans  and  founded  empires  or  factories.  Like  the  early  settle- 
ments of  all  European  nations,  the  ultimate  object  of  these 
conquests  or  occupations  was  the  creation  of  a  sole  market,  a  right 
guarded  jealously  and  angrily,  as  we  know  from  the  issue  of  the 
Darien  expedition.  After  the  Treaty  of  Utrecht,  the  subordinate 
agreement,  known  as  the  Assiento  treaty,  the  commencement  of 
the  English  slave  trade,  the  proximate  cause  of  the  South  Sea 
Bubble,  and  the  occasion  of  a  short  war  with  Spain,  was  the  con- 
cession of  a  very  limited  right  of  trade  with  the  Spanish  plantations. 
The  Spaniards  governed  their  colonies  in  a  peculiar  manner.  No 
one  was  permitted  to  have  a  share  in  their  administration,  unless 
he  were  a  native  Spaniard,  sent  out  for  the  purpose.  Men  born, 
though  of  the  purest  Spanish  blood,  in  these  settlements,  were  per- 
petually disabled  from  all  share  in  the  government  of  the  colony. 
It  is  no  wonder  that  the  Spanish  colonies  revolted.  The  wonder 
was,  when  Canning,  as  he  said  prematurely,  called  in  the  New  World, 
in  order  to  redress  the  balance  of  the  Old,  that  the  revolt  had  not 


THE  DI8C0VEBIE8  OF  POBTUGAL  AND  SPAIN.      321 

occurred  long  before.  No  human  ingenuity  could  have  suggested 
a  worse  government  than  that  of  the  Spanish  colonies.  The  ad- 
ministration of  Spain  itself  was  bad  enough,  but  it  was  wisdom 
compared  with  the  other. 

This  lack  of  commercial  enterprise  in  England  was,  I  do  not 
doubt,  due  to  the  cause  which  I  have  before  commented  on.  Eng- 
land produced  next  to  nothing  for  foreign  trade,  and  had  therefore 
nothing  to  traffic  with.  Its  industries,  such  as  they  were,  were  for 
itself,  with  a  small  overplus  of  coarse  goods  for  its  neighbours.  This 
appears  to  me  to  be  indicated  by  the  maritime  enterprise  which 
characterizes  the  latter  part  of  the  sixteenth  century.  The  great 
captains  of  the  age,  Drake,  Frobisher,  Hawkins,  Kaleigh,  were 
buccaneers  or  pirates,  on  the  look  out,  not  for  opportunities  of  trade, 
or  for  the  foundation  of  colonies,  but  for  plunder,  or  at  best  for 
gold.  They  plundered  the  Spanish  and  Portuguese  ships  on  the 
high  seas,  intercepted  the  Plate  fleet,  and  did  mischief  in  the 
Spanish  ports.  One  of  them  visited  Labrador,  and  struck  with  the 
masses  of  bright  crystal  on  the  coast,  conceived  that  the  stone  must 
contain  gold,  and  shipped  it  to  England.  Ealeigh  was  fired  by  the 
example  of  Cortes,  and  dreamed  of  an  American  city,  which  like 
the  ancient  and  forgotten  buildings  of  the  giant  kings  before  Noah, 
were  composed  of  gold,  silver,  and  precious  stones,  which  he  called 
Eldorado.  Undoubtedly  the  enterprise  of  Elizabeth's  later  years 
was  supremely  useful,  but  the  taint  of  the  original  buccaneering 
clung  to  it,  till  the  English  people,  somewhat  late  in  the  day, 
checked  it  by  hanging  Kidd  and  his  comrades  at  Execution  dock. 
But  by  the  time  of  William  III.  English  trade  had  become  important 
enough  to  turn  buccaneering  from  an  heroic  virtue  into  a  crime 
which  had  to  be  suppressed. 

The  English  Government  has  never  colonized,  except  with  con- 
victs. English  settlements  had  the  inestimable  advantage  of  being 
spontaneous,  or,  at  least,  of  having  owed  more  to  the  neglect  of 
the  mother  country  than  to  its  interference.  Practically  the  first 
settlement  of  Englishmen  on  the  vifisiwwr  shore  of  North  America, 
was  due  to  the  emigration  of  the  Puritans  who  fled  from  the 
ritual  and  discipline  of  Laud,  for  the  first  settlement  of  Virginia  was 
a  total  failure,  though  the  name  survived.  The  places  where  these 
colonists  landed  are  now  great  and  wealthy  cities,  united  into  a 

22 


322  BI8E  AND  PBOQEESS  OF  THE  COLONIAL  TBADE, 

gigantic  confederation.  But  when  they  were  first  settled,  the 
colonists  had  to  contend  with  an  inhospitable  climate,  a  barren  soil, 
and  the  enmity  of  shrewd,  active,  and  bloodthirsty  savages.  I  never 
saw  land  so  utterly  uninviting  as  that  of  the  Atlantic  sea-board  from 
Maine  to  New  Jersey,  and  yet  I  have  examined  the  agriculture  of 
the  North  German  plains.  The  country  I  speak  of  is  not  only  in- 
fertile, but  subject  to  tropical  heat  in  summer,  and  Arctic  cold  in 
winter.  It  is  infested  by  tormenting  and  destructive  insects,  the 
latter  a  periodical  plague.  It  had  one  perennial  source  of  plenty  if 
not  of  wealth  as  yet,  in  its  fisheries. 

The  American  plantations  readily  acquiesced  in  the  English 
Commonwealth.  They  fell  in  as  readily  with  the  Kestoration.  The 
capture  of  New  Amsterdam  from  the  Dutch,  and  its  new  name, 
taken  from  the  Duke  of  York,  gave  the  English  settlements  a  sea- 
board from  Maine  to  the  Caiolinas,  for  New  Jersey  followed  the 
fortunes  of  New  York.  The  settlers  had  penetrated  very  little 
inland,  when  the  Calverts  founded  Maryland,  and  Penn  the  Quaker 
the  great  state  which  goes  by  his  name.  These  later  plantations 
were  settled  at  the  expense  of  English  adventurers,  who  had  the 
hereditary  government  of  the  colony,  ultimately  bought  up  by  the 
British  Government,  when  the  trade  of  the  colony  was  worth  con- 
trolling. The  early  history  of  these  settlements  has  been  occupy- 
ing the  attention  of  Mr.  Doyle,  of  All  Souls.  The  first  of  these  to 
attract  the  attention  of  the  English  Government  from  the  point  of 
view  before  English  merchants  and  statesmen  who  wished  to 
conciliate  English  merchants,  I  mean  the  establishment  and 
maintenance  of  a  sole  market,  were  the  Southern  Plantations,  and 
in  particular  Virginia,  one  of  whose  products  rapidly  procured  a 
European  reputation  and  a  European  market. 

This  product  was  tobacco.  Europe  gave  the  sugar  cane  and 
the  cotton  plant  to  the  New  World,  and  received  from  it  maize, 
tobacco,  and  the  potato.  Tobacco  smoking,  as  all  the  world 
knows,  was  common  enough  in  England  during  the  early  part  of 
the  seventeenth  century,  to  excite  the  ire  and  stimulate  the 
literary  activity  of  the  unwashed  James.  It  appears  to  have 
been  cultivated  in  the  midland  counties,  and  particularly  in 
Gloucestershire.  Under  the  new  tariff  of  the  Eestoration,  the 
manuscript  of  which — one  of  the  few  volumes  which  survived  the 


THE  AMEBIC  AN  PLANTATIONS.  828 

fire  in  which  the  old  Palace  of  Westminster  was  destroyed — is 
preserved  in  the  House  of  Commons  Library,  signed  by  Sir  Harbottle 
Grimston  the  Speaker,  tobacco  was  subjected  to  a  customs  duty,  and 
the  English  cultivation  of  it  was  forbidden.  Then  recourse  was  had 
to  Spanish  tobacco,  but  this  was  very  dear,  10s.  to  128.  a  pound. 
Soon  the  cultivation  made  great  way  in  Virginia,  where  it  was 
easily  raised  and  cured,  and  from  which  it  could  be  sold  cheaply. 
In  a  few  years,  Virginia  expelled  Spanish  tobacco  from  the 
English  market.  For  a  time  the  two  kinds  were  mixed.  Soon, 
however,  only  colonial  tobacco  was  imported.  A  few  years  later 
and  the  produce  of  the  British  colonies  supplied  the  world.  It 
became  the  basis  of  a  new  fiscal  system,  a  compact  between  Eng- 
land and  her  American  colonies,  and  was  pressed  into  the  service 
of  that  commercial  scheme  which  was  thought  to  be  the  highest 
wisdom      This  was  the  sole-market  theory. 

The  doctrine  that  the  commercial  prosperity  of  a  country 
depends  on  the  creation,  maintenance,  and  extension  of  a  sole 
market  for  its  products  and  for  its  supplies,  was  prevalent  from 
the  discovery  of  the  New  World  and  the  Cape  Passage  down  to  the 
war  of  American  Independence.  This  was  the  principal  object  of 
Borgia's  Bulls.  This  was  what  animated  the  Dutch,  in  their 
successful,  in  the  end  too  successful,  struggle,  after  a  monopoly 
of  the  Spice  islands.  This  was  the  motive  which  led  to  the 
charters  of  the  Russian  Company,  the  Levant  Company,  the 
East  India  Company,  the  Turkey  Company,  the  Hudson's  Bay 
Company,  in  England.  The  theory^as  organized  in  the  colonial 
system,  which  Adam  Smith  examined,  attacked,  and  as  far  as  argu- 
ment could  go,  demolished  in  his  great  work.  But  the  dream  of  a 
sole  market  is  still  possessing  the  Germans  and  the  French.  The 
insane  passion  for  this  costly  and  ruinous  monopoly  has  led  to 
the  raid  on  Tonquin,  and  the  scandalous  and  unjustifiable  attack  on 
Madagascar,  by  the  latter,  to  the  protectorate  of  Zanzibar,  the 
settlement  on  Angra  Pequena,  and  the  occupation  of  North  New 
Guinea  by  the  former.  How  long  the  experiment  will  be  per- 
sisted in  I  cannot  guess.  Nations  and  governments  are  seldom 
willing  to  confess  themselves  to  have  been  in  the  wrong,  and, 
indeed,  nations  have  little  opportunity  for  giving  efi'ect  to  their 
regrets,  as  long  as  their  rulers  are  impenitent,  and  do  not  per- 


824  BISE  AND  PMOOBESS  OF  THE  COLONIAL  TBADE. 

soually  suffer  for  their  errors.  But  this  I  can  predict  with 
conndence.  For  every  pound's  worth  which  these  peoples  buy 
and  sell  in  their  conquests  and  occupations,  they  will  have  to 
pa-y  another  pound  out  of  German  and  French  taxes  in  order  to 
maintain  and  secure  the  sole  market,  even  if  they  get  off  as 
cheaply  as  that.  I  know  pretty  well  -v^hat  our  colonies  of  conquest 
have  cost  us,  and  still  cost  us.  These  colonies  of  conquest 
were  all  made  with  the  object  of  a  sole  market,  and  we  have  in 
return  from  the  people  whom  we  have  created,  protected,  and 
maintained  at  an  enormous  cost,  the  grateful  acknowledgment  of 
hostile  tariffs. 

The  early  wars  of  Europe  were  wars  of  conquest.  '  Such 
were  our  wars  with  France.  Such  was  the  extension  of 
North-eastern  Germany  by  the  Teutonic  knights  at  the  ex- 
pense of  the  Slaves  of  old  Prussia  and  Lithuania,  and  of  the 
Hanseatic  League.  After  them  came  the  wars  of  religion,  from 
the  outbreak  of  the  Insurrection  in  the  Low  Countries,  and  the 
civil  wars  in  France,  down  to  the  Peace  of  Westphalia  in  the 
middle  of  the  seventeenth  century.  From  that  day  to  our  own, 
European  wars  have  been  waged  on  behalf  of  the  balance  of 
power,  the  principal  mischief-maker  in  the  contest  being  France. 
The  English,  the  French,  and  the  Dutch  were  the  competitors  in 
the  wars  for  a  sole  market.  But  Holland  was  practically  ruined 
at  the  peace  of  Aix-la-Chapelle,  and  France  was  stripped,  as  I 
have  told  you,  of  her  colonies  at  the  peace  of  Paris,  and  England 
became  not  only  the  principal  maritime,  but  the  principal 
manufacturing  and  mercantile  country  in  the  world.  As  regards 
English  trade,  however,  though  Lidia  was  an  outlet  to  some 
extent  for  English  goods,  its  trade  was  in  the  hands  of  a  chartered 
company,  whom  the  Seven  Years'  War  had  left  in  serious  straits. 
The  most  important  sole  market  which  Great  Britain  had 
acquired  by  her  wars  was  the  sea-board  of  North  America.  To 
support  the  finances  of  the  chartered  company,  the  British 
Parliament  determined  on  taxing  the  inhabitants  of  her  sole 
market,  and  the  result  as  you  know  was  the  war  of  American 
Independence^  and  with  it  the  explosion  of  the  theory  which  I  am 
about  to  describe. 

The  colonial  or  sole-market  system  was  based  on  a  strict  recip- 


WAB8  OF  CONQUEST,  OF  BELIQION,  OF  TBADK      325 

rocity.  The  English  Government  admitted  colonial  produce  into 
the  English  markets  at  differential  auties,  or  prohibited  the  produce 
of  foreign  nations  and  foreign  colonies  altogether.  The  Colonies 
were  not  only  the  customers  of  English  manufacturers  only, 
to  the  absolute  exclusion  of  foreign  manufactures,  but  were 
prohibited  from  undertaking  those  manufactures  themselves. 
The  English  Government  adopted  with  their  colonies  the  policy 
which  they  adopted  with  Irish  manufactures,  which  they  also 
prohibited,  but  with  this  difference,  that  they  disabled  the  Irish 
from  having  any  trade  whatever  with  England,  with  the  Colonies, 
and  with  foreign  countries.  They  wished  to  extinguish,  with  one 
exception,  every  Irish  product,  an'd  to  constitute  themselves  the 
sole  manufacturers  and  shopkeepers  for  the  Irish.  They  allowed 
only  the  linen  manufacture  of  Ulster.  The  Irish  were  to  be,  with 
this  exception,  agriculturists  only,  but  they  were  to  be  disabled 
from  selling  their  agricultural  produce  in  England,  or  elsewhere. 
They  were  practically  denied  the  right  of  trade.  I  need  hardly 
inform  you,  that  under  these  conditions,  the  position  of  the 
peasantry,  subject  through  Poynings'  Act  to  the  English  Privy 
Council,  and  constrained  to  pay  rack-rents  to  landowners  who  were 
frequently  absentees,  was  that  of  a  race  which  is  constrained 
to  pay  tribute,  under  the  most  disadvantageous  terms.  The 
commercial  relations  of  England  and  Ireland,  from  shortly  after 
the  Eestoration  to  the  acknowledgment  of  the  independence  of 
the  Irish  Parliament,  were  in  the  last  degree  oppressive  to  the 
latter.  It  was  the  doctrine  of  the  sole  market  in  its  most 
exaggerated  form. 

To  external  appearance  the  relations  of  the  colonial  system  were 
reciprocal  and  beneficial.  There  are  certain  minds  to  which 
this  reciprocity  is  even  now  exceedingly  attractive,  and  unless  we 
are  wrongly  informed,  there  are  not  only  individuals  but  a  party 
which  would  seek  to  restore  this  ancient  condition  of  things — not 
indeed  in  its  full  force,  for  to  that  there  are  grave  existing 
dijQ&culties,  not  to  say  vigorous  counter  theories  in  the  protective 
laws  of  most  of  our  colonies,  but  with  as  much  reciprocity  as 
possible.  They  would  confer,  for  example,  special  advantages 
on  the  settlers  in  our  colonies  for  their  products,  while  they  are 
straining  every  effort  to  exclude    our  products,  and  are    even 


326  BISJE  AND  FROGBESS  OF  THE  COLONIAL  TEADE, 

arguing  that  the  time  is  come  when  our  workmen  should  be 
excluded  from  settling  among  them,  except  on  the  payment  of 
a  heavy  customs  duty.  I  take  it,  if  a  butcher  was  constrained 
by  positive  law  to  deal  with  that  grocer  only  whom  he  sup- 
plied with  meat,  and  the  grocer  to  deal  with  that  butcher 
only  whom  he  supplied  with  groceries,  the  ingenuity  of  man 
could  not  devise  a  more  certain  process  for  getting  inferior  meat 
and  adulterated  groceries.  But  if  the  butcher  were  prohibited 
by  law  from  buying  the  other  dealer's  groceries,  and  the  grocer 
was  still  constrained  to  buy  the  butcher's  meat,  it  is  pretty  certain 
that  the  meat  would  get  worse  and  worse  till  it  eventually  became 
carrion. 

A  brief  reflection  will  show  how  futile,  how  mischievous,  such 
an  arrangement  must  have  been.  A  reciprocity  of  advantage  in 
reality  implies  a  reciprocity  of  loss.  For  if  the  benefit  exists  in  a 
voluntarily  reciprocal  trade,  it  will  be  appreciated  and  appropriated, 
and  needs  no  law  to  secure  it.  But  the  law,  it  is  said,  will  instruct 
persons  in  the  benefit  which  they  would  not  otherwise  recognize. 
This  affirms  that  they  who  frame  the  law  know  better  than  those  who 
engage  in  the  business  what  their  true  interest  is  in  trade.  But 
such  a  shrewdness  on  the  part  of  law-makers  has  never  been 
discovered  yet  and  never  will.  The  men  who  make  laws  on  trade 
matters  either  possess  the  necessary  knowledge  of  the  subject 
themselves,  by  having  engaged  in  the  trade,  or  they  borrow 
their  knowledge  from  the  people  who  have  more  experience  than 
the  law-makers  possess.  Now  the  man  who  has  the  knowledge,  or 
the  man  who  imparts  the  knowledge,  invariably,  if  he  is  dis- 
interested, and  does  not  want  to  turn  the  machinery  of  law  to  his 
private  advantage,  legislates  or  advises  legislation  for  the  purpose 
of  protecting  or  rather  facilitating,  and  not  for  creating  trade. 
In  other  words,  he  advises  that  men  should  find  out  for  themselves 
where  or  how  to  do  business,  and  that  the  law  should  be  em- 
ployed only  to  diminish  the  risk  or  cost  of  the  business  after  it  is 
formed,  or  to  assist  in  the  due  satisfaction  of  contracts  after  they 
have  been  entered  into. 

That  stage  of  the  colonial  trade  in  which  the  use  of  Virginian 
tobacco  superseded  that  of  the  Spanish  product  was  a  spontaneous 
and  natural  advantage  to  both  parties.     The  colonial  eystem,  as  it 


THE  COLONIAL  SYSTEM.  827 

was  developed  later  on,  did  not  create  and  would  not  have  expedited 
this  trade.  It  is  true  that  in  those  early  days  the  Navigation 
Act,  originally  intended  to  interfere  with  the  carrying  trade  of  the 
Dutch,  led  to  the  freight  of  Virginian  tobacco  being  a  British 
monopoly,  as  far  as  the  ports  of  Great  Britain  were  concerned. 
But  freight  is  one  thing,  trade  profit  another.  The  Dutch  shippers 
could  not  carry,  except  under  penal  charges,  goods  into  British 
ports.  But  Dutch  traders  did  deal  with  colonial  produce,  and  very 
extensively  too.  Nay,  the  existence  of  a  sole  right  of  carrying 
freight,  if  no  restraint  is  put  on  shippers,  might  make  it  better 
worth  while  for  the  trader  to  use  the  services  of  a  foreign  carrier 
than  to  use  those  of  the  carriers  of  his  own  people.  This  is  the 
case  at  the  present  time.  The  British  shippers  carry  goods  at  a 
cheaper  rate  than  any  other  nation  does.  Some  people  say  at 
ruinously  low  rates.  Let  us  assume,  for  the  sake  of  argument, 
that  this  country  has  procured  the  carrying  trade  of  the  world 
because  it  conveys  goods  at  10  per  cent,  less  than  other  nations 
do,  or  perhaps  can,  and  further  that,  one  thing  with  another  (the 
figures  are  used  for  illustration  only),  the  cost  of  freight  is  10  per 
cent,  all  round  of  the  value  of  goods  delivered  at  their  ports  of  des- 
tination. Is  it  reasonable  to  conclude  that  a  trader,  whose  motive 
to  economical  action  is  expectant  profit,  will  sacrifice  so  great 
an  advantage  as  is  implied  in  these  figures  for  sentimental  reasons  ? 
The  effect  of  the  Navigation  laws  may  be  profitably  studied  in  the 
history  of  the  English  marine  from  the  Kestoration  to  the  Eevolu- 
tion. 

Towards  the  latter  end  of  the  eighteenth  century,  American 
cotton  came  into  the  English  market.  The  story  of  a  consignment  of 
some  bales  to  the  house  of  a  Liverpool  produce  broker,  Mr.  Rathbone, 
is  often  quoted  by  those  who  scribble  books  on  the  romance  of  trade. 
The  produce  was  at  first  neglected.  It  was  afterwards  taken  up, 
and  out  of  that  original  consignment,  Httle  more  than  a  century 
ago,  has  been  developed  the  prodigious  cotton  mdustry  of  the 
North  of  England  and  Southern  Scotland.  The  trade  was  in  its 
infancy  at  the  end  of  the  century,  though  it  was  making  great 
profits  to  those  who  worked  up  the  material  In  the  debates  on 
the  Irish  union.  Sir  Robert  Peel,  the  father  of  the  great  minister, 
demurred  to  the  roseate  picture  which  Pitt  and  his  followers  drew, 


828  BI8E  AND  PBOGBESS  OF  THE  COLONIAL  TBADE, 

of  what  Ireland  would  become  after  the  Union ;  for  the  cotton 
Bpinner  of  Bury  expressed  his  alarms  at  the  future  rivalry  of  the 
Irish.  Now  no  rational  person  would  believe  that  the  use  of 
cotton  as  a  raw  material  would  have  been  facilitated  by  the 
colonial  system,  then,  as  far  as  the  American  colonists  were 
concerned,  abrogated  by  the  fortune  of  war,  more  than  it  was  by 
a  rational  self-interest,  when  the  utility  of  the  material  were 
discovered. 

The  colonial  system,  under  which  advantages  were  secured  to 
the  colonial  producer  by  giving  him  a  preferred  market  in  Great 
Britain,  while  the  colonist  was  debarred  from  engaging  in  manu- 
factures, was  a  selfish  one  on  the  part  of  the  English  merchants 
and  manufacturers.  It  gave  the  colonist  a  sole  market,  it  is  true. 
But  it  does  not  follow  that  a  sole  market  is  a  high  market.  On 
the  contrary,  it  is  probable  that  the  offer  of  a  sole  market  is 
intended  to  secure  a  low  market.  The  Virginian  planter  sent  the 
whole  of  his  tobacco  to  England.  The  English  trader  re-exported 
it  to  other  countries,  say  Holland  or  Germany.  It  may  be  pre- 
sumed that  he  made  a  profit  on  the  original  consignment,  and  on 
the  re-exportation,  or  he  would  not  have  undertaken  the  business. 
In  such  a  case  the  Dutch  or  German  consumer  paid  more  than  he 
need  have  paid  had  he  dealt  first  hand  with  the  Virginian  planter, 
and  by  parity  of  reasoning,  the  Virginian  planter  received  less,  for 
the  difference  between  the  English  imported  price,  and  the  Dutch  or 
German  re-exportation  price,  would  on  every  hypothesis  of  trade, 
have  been  shared  between  the  planter  and  the  foreign  purchaser. 
You  will  observe,. too,  that  the  reciprocal  business  was  limited  to 
objects,  on  the  colonial  side,  which  England  could  not  produce ;  and, 
on  the  English  side,  to  manufactures  which  the  foreign  nations 
could  have  produced  as  well  as  the  manufacturer,  who  got  a  sole 
market  for  his  wares.  So  inveterate  and  widespread  was  the 
delusion,  however,  as  to  the  benefits  of  a  sole  market,  that  it  does 
not  appear  that  the  colonist  resented  an  arrangement  under  which 
he  got  all  thfe  losses  and  the  British  manufacturer  and  merchant 
all  the  gains  of  this  regulated  monopoly.  For  he  was  blinded  to 
the  true  meaning  of  the  relation  by  the  differential  duty  put  on 
goods  like  his,  but  produced  on  colonial  soil. 

In  course  of  time  these  differential  duties  became  to  the  residual 


THE  TIMBER  AND  8UGAB  DUTIES.  829 

British  colonies  after  1782  an  apparent  advantage,  to  the  English 
consumer  a  real  loss.  About  forty  years  ago,  there  were  two 
articles  of  colonial  produce  on  which  the  differential  duties  were 
serious.  These  were  Canadian  timber  and  West  India  sugar. 
Other  countries  could  supply  us  with  timber  of  better  quality  and 
at  cheaper  rates  than  Canada  did,  for  of  course,  by  putting  an  extra 
duty  on  foreign  timber,  we  were  giving  the  Canadian  lumberers  a 
price.  However,  at  last  the  differential  duties  went  with  the  other 
tariff  reforms,  not  without  warnings  that  Canada  would  be  disaffected 
if  her  lumberers  were  disabled  from  rifling  our  pockets.  The  sugar 
duties  were  defended  on  different  grounds.  The  English  nation 
had  abolished  slavery  in  the  sugar  colonies  of  this  country,  and 
had  compensated  the  owners  of  the  slaves.  But  other  sugar-pro- 
ducing countries,  as  Cuba  and  Brazil,  had  not  followed  our  example. 
When  the  movement  began  for  the  abolition  of  the  differential 
duty,  there  arose  a  cry,  **  How  can  the  English,  who  have  abolished 
slavery,  purchase  sugar  produced  in  those  unchristian  countries 
which  still  maintain  this  institution  ? "  Now  in  my  opinion, 
slavery  is  detestable.  I  agree  with  Wesley,  who  said  that  it  was 
the  sum  of  all  human  villainies,  and  said  that  before  Granville 
Sharpe  and  the  elder  Wilberforce  began  their  crusade  against  it. 
But  it  is  also  ruinous  to  the  country  which  adopts  and  maintains 
it,  and  I  am  quite  certain  that  its  economical  disadvantages  far  out- 
weigh any  economical  profit  which  can  be  gotten  from  it.  But  I 
am  also  certain  that  when  a  man  appeals  to  my  piety  and  my 
Christianity  in  order  that  he  may  keep  some  business  advantage, 
he  is  a  very  dangerous  man  to  do  business  with,  a  suspicious 
character.  This  maxim  was  well  illustrated  during  the  controversy 
on  slave-grown  sugar.  It  was  found  that  some  of  the  loudest 
humanitarians  in  Jamaica  and  Barbadoes  had  been  in  the  habit  of 
importing  slave-grown  sugar  from  Brazil  and  Cuba,  and  exporting 
it  to  England  as  genuine  free- soil  produce.  You  may  be  surprised 
to  hear  it,  but  it  is  a  proof  how  con^pletely  phrases  take  possession 
of  men,  when  such  phrases  indicate  their  material  interests,  and 
how  little  evidence  does,  for  though  they  were  detected  they  were 
not  silenced. 

Most  of  the  American  colonies  were  constituted  under  charters, 
given  to  the  projectors  and  founders  of  these  plantations.     Now  it 


830  BI8E  AND  PEOGBESS  OF  THE  COLONIAL  TBADE, 

was  clear  that  sucli  rights  as  were  possessed  by  these  founders  and 
their  representatives,  checked  the  growth  of  the  colony,  and 
materially  interfered  with  the  development  of  the  system  which 
seemed  so  wise  and  profitable.  Hence  Parliament,  twice  in  the 
early  part  of  the  eighteenth  century,  was  invited  to  pass  a  Bill, 
under  which  the  rights  of  the  proprietors  should  be  purchased, 
and  the  old  charters  should  determine.  There  was  a  good  deal 
of  opposition  shown  to  this  scheme  by  the  representatives  of  the 
various  families  in  whose  interests  the  charters  were  granted.  On 
the  first  occasion,  during  the  reign  of  Anne,  the  Bill  was  decisively 
rejected  on  the  second  reading.  It  was  again  brought  in  at  the 
beginning  of  George  I's.  reign  (1715)  was  then  read  a  second  time, 
and  was  referred  to  a  select  committee,  which  did  not  report,  and 
the  Bill  disappeared.  I  found  among  the  Parliamentary  papers  of 
Mr.  Hamaiond,  sometime  member  for  Huntingdon,  a  number  of 
memorials,  similar  to  those  now  circulated  among  members,  con- 
taining reasons  against  the  proposal.  They  were  not  known  in 
America,  to  which  country  I  seat  copies  of  the  originals.  Ulti- 
mately these  rights  were  purchased,  when  they  had  become 
considerably  enhanced.  It  is  part  of  the  irony  of  history  that  the 
British  taxpayer  is,  or  was  recently,  paying  a  perpetual  pension  to 
the  heirs  of  William  Penn,  for  the  surrender  of  this  personage's 
right  in  Pennsylvania. 

The  colonial  system  did  not  preclude  the  plantations  from 
sending,  under  the  strict  conditions  of  the  Navigation  Act,  certain 
kinds  of  produce  to  other  countries  than  England.  These  were 
called  non-enumerated  commodities,  the  principal  being  corn,  timber, 
salted  provisions,  fish,  sugar,  and  rum.  There  was  a  reapon  for 
this,  which  was  to  be  found  in  the  fiscal  system  of  England.  We 
did  not  want  colonial  corn,  for  there  were  duties  on  corn,  levied  in 
the  interest  of  the  landlords,  nor  colonial  timber,  salted  meat  and 
salted  fifch,  for  the  home  produce  of  these  articles  were  similarly 
assisted.  Sugar  and  rum  were  allowed  to  be  exported,  for  the 
owners  of  the  plantations  in  the  Leeward  isles  were  chiefly  absentee 
English  proprietors,  who  had  already  a  monopoly  of  English 
supply,  and  were  powerful  enough  in  Parhament  to  get  an  extended 
market  elsewhere.  But  in  1769,  just  before  the  troubles  broke  out 
with  the  American  plantations,  an  Act  was  passed,  disabling  the 


ENUMEBATED  AND   UNENUMEBATED  GOODS.        331 

colonists  from  sending  even  the  n on- enumerated  commodities  to 
any  country  north  of  Cape  Finisterre,  in  Northern  Spain.  The 
object  of  this  restrauit,  was  to  prevent  a  trade  even  in  these 
articles  with  comitries  which  had  any  manufacturers,  lest  the 
colonists  should  find  out  that  they  could  buy  goods  cheaper  than  in 
England. 

The  enumerated  goods,  and  there  was  a  long  list  of  them,  could 
be  exported  to  Great  Britain  only.  They  consisted,  as  Adam 
Smith  says,  of  what  could  not  be  produced  in  this  country,  and 
what  could  be  produced  in  great  quantity  in  the  Colonies.  But 
the  colonial  manufactures  were  either  forbidden  altogether,  or 
their  exportation  and  importation  within  the  Colonies  were  bur- 
dened with  such  excessive  duties,  as  practically  to  confine  the 
manufacture,  if  it  existed,  to  a  scanty  home  supply.  Steel  mills 
and  all  manufactories  for  working  iron  were  prohibited  in 
America,  trade  between  the  different  settlements  was  forbidden, 
if  the  trade  was  in  a  local  manufacture,  in  fact,  not  a  horse- 
shoe or  a  nail  could  be  forged  in  the  whole  of  the  transatlantic 
colonies.  When,  therefore,  the  War  of  Independence  broke  out, 
the  American  colonists  were  agriculturists  only.  Had  it  been 
possible  to  blockade  all  the  ports,  the  insurgents  would  soon  have 
been  unarmed,  for  they  could  of  themselves  have  provided  no 
munitions  of  war.  Hence  the  revolt  of  the  plantations  was  an\ 
interruption  to  British  trade,  and  a  signal  to  other  nations  that 
they  might  now  enter  on  a  commerce  from  which  they  had  hitherto  \ 
been  rigidly  excluded.  This,  I  am  persuaded,  had  as  much  to  do 
with  the  assistance  given  to  the  United  States  by  many  European 
Governments,  as  any  desire  to  avenge  the  reverses  of  1763. 

The  acknowledgment  of  American  independence  was  supposed  to 
herald  the  downfall  of  the  commercial  greatness  of  England.  When 
Gibbon  declined  to  meet  Franklin,  on  the  ground  that  he  would 
hold  no  intercourse  with  a  rebel,  the  American  Teplied  that  if 
the  historian  had  the  leisure,  he  would  be  willing  to  supply  him 
with  materials  for  a  new  narrative,  of  the  decline  and  fall  of  the 
British  Empire.  He  was  merely  expressing  a  common  opinion. 
But  though  England  had  to  abandon  the  colonial  system,  and  never 
afterwards  ventured  to  levy  taxes  by  her  Parhament  on  the  smallest 
and  weakest  of  her  dependencies,  she  began   to  build  up  a  new 


332  BI8E  AND  PROGBESS  OF  THE  COLONIAL  TBADE. 

colonial  empire.  She  occupied  succeseively  all  those  parts  of  the 
world  in  which  European  races  can  thrive  and  increase,  and,  whether 
in  the  course  of  time  she  will  retain  them  or  not,  as  nominally 
dependent  on  the  centre  of  Great  Britain,  it  is  certain  that  at 
no  remote  date  the  English-speaking  races  will  be  more  numerous 
than  any  other  people.  The  relations  which  have  subsisted  between 
England  and  her  still  associated  colonies  is  the  topic  with  which  I 
shall  conclude  this  lecture.  As  before,  I  shall  deal  with  the 
economical  relations  only,  but  in  fact  the  political  relations  have 
now  become  entirely  economical,  for  no  reasonable  person  doubts 
that  if  the  English  colonies  were  decidedly  convinced  that  the 
interests  of  the  colony  made  independence  seem  desirable,  no 
military  attempt  would  be  made  to  retain  the  political  depen- 
dence of  the  settlement.  They  are  to  be  united  to  us  by  the  tie  of 
self-interest  only,  and  self  Interest  is  an  economical  tie. 

I  mentioned  in  an  earlier  lecture  that  the  doctrine  of  the  sole 
market  was  succeeded  by  the  doctiine  of  the  flag.  The  old  phrase 
was—  conquest  first  and  law  afterwards  make  trade,  a  position  sadly 
interfered  with  by  interlopers,  buccaneers,  and  smugglers.  The 
newer  phrase  was  occupation  by  the  sword,  or  by  prior  settlement, 
with  the  careful  management  of  the  colony,  with  the  first  process 
well  in  view,  but  with  the  hope  that  custom,  tradition,  and  the 
careful  nursing  of  all  which  wanted  nursing,  would  carry  the  pre- 
eminence of  the  flag.  England  now  held  her  colonies.  As  long  as 
the  colonies  wanted  nursing,  as  they  wanted  or  thought  they  wanted 
it  forty  years  ago,  this  policy  fostered  the  growth  of  the  British  race 
in  distant  parts,  its  extension,  and  as  was  hoped,  its  consolidation. 
I  am  speaking  of  what  I  noticed  (for  I  was  early  schooled  in  these 
matters,  a  good  while  ago),  and  of  what  I  criticized,  not  without 
much  obloquy.  To  a  sensible  man,  convinced  that  he  has  no  pre- 
judices, but  only  facts  before  him,  which  he  is  bound  to  interpret, 
obloquy,  especially  from  a  daily  or  weekly  paper,  is  cackle.  I  only 
regret  that  men  whom  I  have  worked  with  more  years  ago  than  I  now 
care  to  count,  seem  to  be  deterred  from  the  logical  conclusions  of 
their  principles,  and  even  from  the  facts  which  illustrate  those 
principles,  by  utterly  unfounded  alarms.  But  the  saddest  thing 
in  the  whole  of  my  experience,  is  the  spectacle  of  that  worst  form  of 
seniliV*  the  dread  of  seeing  that  come  which  one  has  laboured  for, 


THE  DOCTBINE  OF  TEE  FLAG,  333 

and  the  consequent  exhibition  in  maturer  life — the  epoch  of  tho 
manifestation  differs — of  that  in  which  the  best  quaUties  of  one's 
youth  are  changed  into  the  worst  quahties  of  one's  age. 

The  doctrine  of  the  flag,  when  put  into  the  dry  language  of 
economists,  is  that  habit,  old  ties,  family,  social,  political,  will 
correct  the  narrow  and  selfish  interests  which  the  hot  race  for 
wealth  in  new  settlements  engenders.  These  habits  and  ties  are 
greatly  aided  by  local  weakness,  and  I  am  sorry  to  say,  the  local 
weakness  is  too  often  made  a  plea  for  other  aid.  This  is  illustrated 
by  the  historical  relations  which  have  existed  between  this  country 
and  the  British  colonies  of  conquest,  as  opposed  to  the  British 
colonies  of  spontaneous  settlement.  Of  the  former  kind  are  the 
colonies  of  Canada  and  the  Cape  of  Good  Hope ;  of  the  latter, 
Australia  and  New  Zealand.  It  will  be  obvious  that  a  colony  of 
conquest  is  likely  to  contain  disaffected  inhabitants,  or  ill-affected 
neighbours,  and  to  be,  consequently,  a  perpetual  drain  on  the 
material  resources  of  the  country  which  holds  it.  The  possession  of 
such  a  colony  was,  as  I  have  often  said,  due,  in  the  first  place,  to  the 
desire  of  procuring  a  sole  market ;  in  the  next,  to  the  belief  that 
identity  of  race  or  habit  would  maintain  close  commercial  relations ; 
and  perhaps  in  our  time,  the  connection  is  fostered  because  a  kind 
of  national  pride  is  supposed  to  be  assisted  by  the  maintenance  cf 
a  large  number  of  dependencies.  Phrases  such  as  "  the  sun  never 
sets  on  the  British  Empire,"  "Greater  Britain,"  **the  English- 
speaking  race  bids  fair  to  be  the  most  widely  extended  of  any,  and 
the  English  language  the  universal  speech  of  commerce  and  civiHsa- 
tion,"  are  illustrations  of  the  sentiment  to  which  appeals  are  made. 
I  am  far  from  deprecating  these  appeals,  but  they  should  not  be  so 
uttered  as  to  give  the  impression  that  this  country  is  prepared  to 
make  every  sacrifice  for  the  sake  of  maintaining  a  mere  similitude 
of  empire. 

The  colonies  of  conquest  have  been  terribly  expensive  to  this 
country.  In  order  to  destroy  the  design  which  the  French  had 
devised  of  connecting  their  settlement  of  Louisiana  with  their 
settlement  in  Lower  Canada,  the  EngUsh  during  the  Seven  Years* 
War,  conquered  the  latter  and  annexed  it. '  In  dealing  with  the 
French  Canadians,  then  and  subsequently,  the  British  Government 
allowed  them  to  retain  their  local  laws,  and  their  ecclesiastical 


834  BI8E  AND  PBOGBESS  OF  THE  COLONIAL  TBADE. 

system,  and  to  become  pro  tantOy  an  imperium  in  imperio.  The 
Eoman  Catholic  Church  in  Canada  is,  under  these  arrangements, 
probably  the  wealthiest  church  establishment  in  the  world,  and 
possesses  powers,  guaranteed  by  law,  over  the  population,  which 
have  been  rescinded  elsewhere,  as  inconsistent  with  the  due 
supremacy  of  civil  government.  I  do  not  mention  this  to  criticize 
01  impugn  the  arrangement,  but  merely  to  show  how  commercial 
considerations  in  a  bygone  age,  and  in  deference  to  what  is  now  an 
exploded  opinion,  modified  military  and  civil  relations.  In  the  War 
of  American  Independence,  French  Canada  remained  faithful  to  its 
new  masters,  and  though  the  good  sense  of  the  American  people  has 
led  them  ultimately  into  fairly  friendly  relations  with  Canada,  an 
enormous  expense,  spread  over  more  than  a  century,  hasbeenincurred 
in  preserving  this  dependency  from  political  risks.  Even  now  there 
is  a  long-standing  and  menacing  quarrel  about  certain  fishery 
monopolies  claimed  by  the  Dominion,  and,  on  the  other  hand, 
a  strong  party  has  been  formed,  with  the  object  of  putting  an 
end  to  the  war  of  tariffs,  and  the  costs  of  a  custom-house  police 
along  a  mere  geometrical  frontier,  by  establishing  a  zollverein  be- 
tween Canada  and  the  States.  The  English  Parliament  has  spent 
hundreds  of  millions  in  maintaining  the  political  independence  of 
Canada,  and  in  guaranteeing  its  frontier.  The  issue  is  that  having 
adopted  a  strongly  Protectionist  tariff,  which  is  really  war  in 
disguise  on  the  country  which  defends  it,  Canada  is  seeking  to 
contract  a  close  trade  alHance  with  an  equally  Protectionist 
neighbour,  on  the  ground  that  the  war  of  tariffs  between  itself  and 
its  neighbour  has  become  intolerable. 

Another  colony,  that  of  the  Cape,  was  wrested  from  the  Dutch, 
during  the  great  continental  war.  The  intrigues  of  the  British 
Parliament,  partly  stimulated  by  trade  jealousy,  partly  by  the 
family  alliances  of  the  Hanoverian  sovereigns  with  the  utterly 
degenerate  and  disreputable  family  of  Orange,  had  ruined  the  Dutch, 
had  divided  the  people  into  the  bitterest  factions,  and  had  induced 
for  a  time  the  Dutch  people  to  look  on  the  French  occupation  in  the 
early  days  of  the  French  Revolution  as  an  unmixed  boon.  But 
in  ridding  themselves  of  the  wretched  William  V.,  they  became  a 
prey  first  to  the  rapacious  patriots  of  the  French  RepubUc,  and 
next  to  the  family  of  Bonaparte,  for  Napoleon  speedily  carried  out  the 


COLONIES  OF  CONQUEST  AND  OF  SETTLEMENT,    835 

policy  of  Henry  IV.  and  Richelieu.  The  Dutch  possessions,  there- 
fore, at  the  Cape  and  in  the  Indian  Ocean,  became  a  prey  to  the 
British  navy.  It  is  very  likely,  I  cannot  dispute  it,  nor  do  I  attempt 
to  judge  it,  that  the  policy  was  not  only  timely,  and  of  great  strategic 
importance,  hut  had,  at  least  temporarily,  an  economical  and  com- 
mercial defence.  The  policy  of  Napoleon  was  to  exclude  England 
from  the  commerce  of  Europe,  the  retaliatory  policy  of  England  was 
to  exclude  France  and  all  who  were  under  the  influence  of  France 
from  the  rest  of  the  world,  and  the  English  were  far  more  successful 
than  the  French.  They  even  made  a  short  war  on  the  United 
States  in  furtherance  of  this  policy,  one  of  the  last  of  the  prolonged 
wars  of  commerce.  At  the  peace  of  1815,  England  restored  the 
Dutch  possessions  in  the  East,  but  retained  the  Cape,  and  asserted 
British  supremacy  in  South  Africa. 

Since  1815,  we  have  hardly  been  at  peace  with  the  native  races. 
The  English  settlers  were  long  outnumbered  by  the  Dutch,  are, 
I  believe,  now.  It  became  a  maxim  of  policy  to  support,  by  military 
expenditure  and  by  aggressive  and  defensive  wars,  the  due  inflaence 
of  the  colonists  of  English  descent.  I  could  show  you  that  all  the 
profits  of  the  Cape  trade,  enjoyed  of  course  by  those  who  trade  at 
the  Cape,  are  not  and  never  can  be  equal  to  the  interest  on  the 
capital  which  has  been  spent  by  the  British  Parliament  on  the 
progress  and  defence  of  the  Cape  Colony.  Even  now,  after  having 
had  a  war  with  the  Dutch  settlers,  who  have  erected  an  independent 
Dutch  republic,  we  are  threatened  with  another  Dutch  republic, 
which  is  to  occupy  the  lands  at  present  in  the  possession  of  a 
native  tribe,  whom  we  have  taken  under  our  protection.  I  am  not 
concerned  here  with  the  imperial  interests  which  are  contained  in 
this  policy,  but  it  is  indisputable  that  our  economical  interests  are 
not  furthered  by  our  political  action. 

About  twenty-five  years  ago,  Mr.  Goldwin  Smith  and  myself 
called  public  attention  to  the  cost  of  the  British  Colonies.  Half  the 
English  army  was  being  kept  in  them,  at  the  cost  of  the  British 
exchequer,  and  to  the  profit  of  colonial  tradesmen.  Every  particle 
of  British  spirit  was  absent  from  the  colonial  character.  Traders  were 
making  money  fast,  planning  Protectionist  tariffs  in  order  to  enable 
them  to  make  money  faster,  and  calling  on  the  British  exchequer 
to  reheve  them  from  all  risks  at  the  expense  of  the  British  taxpayer. 


836  BISE  AND  PB0GBES8  OF  THE  COLONIAL  TBADE. 

We  thought  the  relation  one-sided,  and  said  so  very  plainly.  We  were 
soundly  rated  for  our  presumption  by  the  British  imperialists,  and 
by  the  colonial  squatters,  many  of  whom  were  beginning  to  return 
to  England  with  fortunes  rapidly  acquired  under  the  system.  But 
our  views  were  taken  up,  and  the  situation  rapidly  improved.  The 
colonists  recognized  that  if  they  were  part  of  an  empire,  they  had 
duties  of  self-defence,  and  a  further  duty  in  the  direction  of  general 
defence,  and  at  the  present  time  I  do  not  know  that  there  is  a 
British  regiment  in  colonial  quarters.  Whether  we  are  making 
a  better  use  of  these  regiments  at  present,  I  do  not  care  to  inquire. 
I  am  sure  that  the  moral  tone  of  the  Colonies  has  improved,  and 
that  our  controversy  was  justified.  At  that  time,  however,  Mr. 
Goldwin  Smith  and  I  were  credited  with  a  design  of  breaking  up 
the  unity  of  the  British  Empire,  and  had  to  pay  the  usual  penalties 
for  premature  wisdom. 

The  British  Colonies  were  for  a  long  time  governed  from  Downing 
Street,  and  by  the  permanent  officials  of  the  Colonial  Office.  They 
had  a  nominal  system  of  Parhamentary  and  responsible  govern- 
ment, but  were  subjected  to  a  thousand  checks.  Discontent 
naturally  followed,  and  discontent  gradually  ripened  to  rebellion. 
As  you  will  find  happening  over  and  over  again  in  English 
history,  the  rebellion  was  chastised  in  the  open  field,  the  leaders 
tried,  convicted,  and  sentenced  to  the  penalties  of  high  treason. 
The  next  act  in  the  drama  was  to  pardon  them,  and  surrender  to 
their  demands,  to  surrender,  in  fact,  more  than  they  asked.  An 
attempt  had  been  made  to  secure  a  provision  for  the  English 
establishment,  in  order  to  keep  it  on  a  level  with  the  rich  and 
guaranteed  establishment  of  the  French  Catholics.  But  an  attack 
was  made  on  the  clergy  reserves,  and  the  Colonial  Office  yielded. 
The  rebels  of  the  Canadian  rebellion  rose  to  high  political  office  in 
their  country,  and  were  finally  decorated  with  the  distinction  of 
knighthood.  I  played  a  little  part  in  the  slaughter  of  the  fatted 
calf  for  those  political  prodigals,  for  I  got  the  University  of  Oxford 
to  make  them  Doctors  of  Law.  We  have  not  as  yet  united  the 
other  customary  substantive  to  our  honorary  degrees. 

When  the  British  Parliament  or,  to  be  more  correct,  the  Colonial 
Office  (for  it  is  very  hard  to  keep  a  House  for  a  colonial  question), 
entirely  surrendered  to  the  colonial  demand  for  free  institutions, 


THE  8UBBENDEB  TO  THE  COLONISTS.  337 

responsible  governments,  and  entire  relief  from  the  Colonial  Office 
veto,  a  surrender  was  made  of  two  principles,  for  the  maintenance 
of  which  at  least  some  struggle  should  have  been  made.  In  the 
United  Kingdom, the  Crown,i.tj.,the  executive,  is  still  the  reversioner 
to  all  land,  and  until  land  is  declared  to  have  a  private  owner,  is 
the  absolute  owner  of  all  unassigned  land.  This  was  surrendered 
to  the  colony,  and  the  colonists  in  Parliament  are  entitled  to  make 
what  regulations  they  please  for  its  sale,  grant,  or  distribution.  I 
do  not  say  that  they  have  used  the  power  unwisely.  In  some 
particulars,  I  am  strongly  of  opinion,  from  what  I  have  seen,  and 
from  what  I  have  heard  and  read,  the  American  Congress  would 
have  done  well  had  they  followed  colonial  practice,  especially  that 
which  Mr.  Gibbon  Wakefield  instituted,  under  which  a  high  mini- 
mum price  was  fixed  for  public  lands.  The  scheme  was  abandoned, 
but  left  a  habit  behind  it.  On  the  other  hand,  the  Federal 
Government  at  Washington  has  never  surrendered  its  rights  over 
the  public  land  to  the  States,  however  much  it  may  have  consulted 
their  interests  or  wishes. 

The  second  part  of  this  total  change  of  front  is  the  discretion 
of  levying  what  tariff  the  Colony  pleases.  In  the  history  of  English 
politics,  as  I  have  had  to  show  you  more  times  than  once  from 
1381  onwards,  uncompromising  resistance  has  been  constantly 
followed  by  unconditional  surrender.  In  1772,  the  inhabitants  of 
the  American  plantal'ons  would  willingly  have  contributed  to  the 
imperial  exchequer.  They  knew  perfectly  well  that  they  had  been 
the  principal  gainers  at  the  Peace  of  Paris,  and  that  debts  had  been 
piled  up  by  Great  Britain  to  an  extent  beyond  previous  experience, 
and  as  was  believed,  beyond  the  capacity  of  the  British  taxpayer. 
They  were  perfectly  willing  to  have  taken  their  share  in  the  charge, 
but  they  claimed  that  it  should  come  from  their  own  action,  not 
from  the  autocratic  will  of  the  British  Parliament,  or,  to  be  more 
correct,  for  the  unreformed  Parliament  was  a  legislative  farce, 
from  the  British  administration,  acting  as  such  administrations 
have  constantly  acted,  with  high-handed,  unconstitutional,  and 
disastrous  pride.  When  it  became  necessary  to  throw  this  policy 
aside,  they  threw  aside  with  it  a  perfectly  sound  principle,  that  in 
the  common  defence  of  mother  country  or  colony,  the  colony  should 
by  its  own  action,  pay  its  own  contribution.   Under  existing  circum- 

23 


838  BISE  AND  PB0GBE8S  OF  TEE  COLONIAL  TBADE. 

stances,  the  Colonies  having  very  properly  refused  to  allow  us  to  tax 
them,  we  have  permitted  the  Colonies  to  tax  us.  Over  and  over 
again,  for  instance  at  the  Cape,  the  local  government  has 
undertaken  a  war,  in  which  it  rarely  had  justice,  and  never  the 
means  for  carrying  on  the  war  in  its  own  hands,  and  having 
compromised  us,  have  called  on  us  to  pay  for  what  they  have  done. 
It  is  impossible  to  conceive  any  system  more  demoralizing  to  the 
colony  and  more  unfair  to  ourselves,  than  to  incur  responsibilities, 
and  put  on  the  shoulders  of  others  the  obligation  of  meeting  them. 

After  the  Colonial  Office  had  perpetually  meddled  with  the 
Colonial  Governments,  and  irritated  them  beyond  description,  they 
entirely  gave  in,  and  made  no  stand  on  a  single  point.  I  remember 
that,  as  a  chief  justice  of  the  Cape  told  me,  in  the  old  days  of  the 
Colonial  Office,  a  retired  general  demanded  of  the  Cape  represen- 
tatives that  they  should  provide  from  the  taxes  salaries  for  a 
number  of  archdeacons.  The  chief  justice  said  that  he  was 
himself  a  Presbyterian,  and  being  unacquainted  with  the  special 
functions  of  an  archdeacon,  asked  the  governor  for  information  as 
to  their  place  and  duiies.  All  that  he  got  from  the  old  soldier  was, 
"Archdeacons,  sir,  there  were  archdeacons  in  the  time  of  Abraham." 
The  chief  justice  was  obliged  to  be  satisfied  with  this  assertion  as 
to  the  continuity  of  history,  which,  from  its  modern  aspect,  my 
friend  Mr.  Freeman  assures  us,  begins  with  the  call  of  Abraham. 
But  when  the  Colonial  Office  at  la&t  had  to  give,  like  Lear,  they 
gave  all,  and  England  has  been  used  by  her  prosperous  offspring, 
almost  as  ill  as  the  mythical  king  was  by  his  daughters.  I  cannot 
see  that  the  English  Government,  when  it  conceded  the  entire 
political  freedom  of  the  Colonies,  and  their  right  to  raise  a  revenue 
and  spend  it  at  their  discretion,  should  not  have  contracted  with 
them  that  the  revenue  should  be  raised  for  the  purposes  of  govern- 
ment, and  not  for  that  of  local  protection,  since  a  protective  tariff 
is  to  all  intents  and  purposes  an  act  of  war. 

•*  The  rulers  of  Great  Britain,"  says  Adam  Smith,  in  the  conclud- 
ing sentences  of  his  great  work,  "have  for  more  than  a  century 
past,  amused  the  people  with  the  imagination  that  they  possessed 
a  great  empire  on  the  west  side  of  the  Atlantic."  Smith  is  speaking 
of  the  American  plantations,  then  in  the  first  struggles  of  the  War 
of  Independence.     *'  This  empire,  however,  has  hitherto  existed  in 


THE  TIE  WHICH  BINDS  THE  COLONIES.  339 

imagination  only.  It  has  hitherto  been,  not  an  empire,  but  the 
project  of  an  empire ;  not  a  gold  mine,  but  a  project  of  a  gold 
mine ;  a  project  which  has  cost,  which  continues  to  cost,  and 
which,  if  pursued  in  the  same  way  as  it  has  been  hitherto,  is  likely 
to  cost  immense  expense,  without  being  likely  to  bring  any  profit ; 
for  the  effects  of  the  monopoly  of  the  colony  trade,  it  has  been 
shown,  are,  to  the  great  body  of  the  people,  mere  loss  instead  of 
profit."  There  is,  as  Adam  Smith  saw,  a  cheap  investment  to  be 
made  in  popular  delusions.  I  know  no  safer  speculation.  If  the 
opinion  of  such  men  prevails,  quite  irrespective  of  their  personal 
efforts,  they  have  taken  a  part  in  the  nation's  salvation,  and  deserve 
reward.  If  their  advocacjj  is  seen  to  be  untenable,  and  is  expended 
on  a  discredited  cause,  they  trust  that  their  personal  obscurity  will 
secure  them  forgetfulness,  or  that  they  may  rely  on  a  vested  in- 
terest. I  have  lived  for  forty  years  among  such  people,  and  for 
as  long  with  others  who  understand  them.  The  hardest  work  of 
my  life  has  been  to  save  them  from  contempt. 

There  is  however  one  tie  between  England  and  her  Colonies,  of 
which  even  Adam  Smith,  despite  his  far-sighted  sagacity,  did  not 
dream.  I  am  no  judge  of  loyalty,  of  attachment  to  a  central  crown 
and  empire,  in  the  place  which  I  hold  before  you.  I  only  pretend, 
as  an  economist,  to  judge  matters  of  business.  We  are  tied  to  the 
Colonies  by  a  bond,  strong  as  adamant,  as  long  as  we  are  wise  and 
they  are  prudent,  but  weak  as  a  rope  of  sand,  if  we  are  unwise, 
and  they  become  desperate,  or  perhaps  become  self-contained. 
They  owe  us  a  great  deal  of  money.  I  do  not  mean  money  which 
the  nation  has  spent  in  its  collective  capacity.  That  is  gone  with 
last  year's  snow,  but  with  money  which  is  registered  and  stocks 
which  are  negotiated  on  the  Exchange.  The  Stock  Exchange  is  the 
weakest  in  one  sense,  the  most  powerful  force  conceivable  in 
another.  It  can  be  wronged  by  a  repudiation  of  obligations 
created  by  it,  and  due  to  it,  and  it  is  unable  to  avenge  its  injuries 
directly.  It  cannot  immediately  punish  its  defaulting  debtors,  or 
enlist  its  own  Government  on  its  own  side.  This  policy  is  now 
abandoned.  It  was  tried,  I  believe,  for  the  last  time  in  Mexico, 
twenty  years  ago,  and  in  Egypt  ten.  But  it  is  not  the  business  of 
the  State  to  collect  debts  due  to  the  subjects  of  the  State.  So  far, 
then,  the  Stock  Exchange  is  weak. 


340  BISE  AND  PBOGBESS  OF  THE  COLONIAL  TBADE, 

But  from  another  aspect  it  is  strong.  It  is  unforgiving  to 
defaulting  communities.  Now  most,  perhaps  all,  communities 
want  at  some  time  or  the  other  to  borrow.  They  will  seek  in  vain 
if  they  have  made  default  in  past  time.  A  taint  clings  to  them 
even  if  they  make  good  past  breaches  of  faith,  even  if  they  appear 
likely  to  commit  such  a  breach,  or  put  themselves  into  a  position 
of  being  able  to  commit  the  offence.  Thus  a  sharp  lesson  was 
taught  the  fjpfanHjjTg  States  of  the__Ajaenofty>  Union  when  they 
repudiated  their  obligations  to  their  foreign  creditors,  and  I  do  not 
suppose  that  a  defaulting  State  would  get  what  is  technically  called 
a  quotation  on  the  Stock  Exchange,  until  it  had  satisfied  its  ancient 
creditors,  principal  and  interest.  The  game  experience  has  come 
to  diverse  transatlantic  Governments,  and  to  Turkey.  A  short  time 
ago,  and  it  was  well-nigh  coming  to  Egypt.  There  is  always  some 
danger  of  repudiation  if  the  stock  is  held  exclusively  by  foreigners, 
as  is  the  case  with  Russia,  or  if  the  loans  are  dangerously  near  the 
possible  margin  of  the  borrowing  country's  powers,  or  if  the  loans 
even  for  public  works  of  a  remunerative  character  are  suspected  to 
be  premature. 

Now  the  interest  on  this  money  is  paid  in  goods.  It  is  no  doubt 
a  strain  to  pay,  and  only  large  natural  profits  render  the  payment 
possible,  even  when  the  profits  are  derived  from  distinctly  remune- 
rative undertakings,  as  railways  and  dues.  But  if  we  were  to 
decline  to  receive  goods  from  them,  or  burden  the  exportation  of 
such  goods  with  heavy  import  duties,  or  even  light  ones,  we  may 
make  that  impossible  which  is  already  difficult,  and  the  fair  traders 
might  find,  if  they  can  persuade  a  majority  of  their  fellow  country- 
men, that  they  have  broken  the  bond  between  the  Colonies  and  the 
mother  country,  and  have  ruined  their  investing  and  too  trusting 
fellow  countrymen  in  the  process.  By  natural  profits,  I  mean  the 
exceptional  bounty  which  new  settlers  are  able  to  appropriate. 


XVI. 

LAI8SBZ  FAIBE:  ITS  OKIGIN  AND  HISTOEY. 

Man  a  wolf  to  Ms  neighbour — TTie  weakness  of  the  social  unit — The 
principle  of  contracts  and  their  enforcement — The  ideal  of  govern- 
ment — Its  disappointing  attitude — Half  truths  in  politics  and  poli- 
tical economy — The  economists  of  France — The  publication  of  "  The 
Wealth  of  Nations" — Gradual  reforms — Laissez  faire  no  panacea 
— The  case  of  the  working  classes,  of  railivays — The  Factory  Acts — 
Lord  Shaftesbury  and  the  children  in  agricultural  service — Edu- 
cation^ primary^  and  the  present  systerri'^Land  and  the  tenant — 
Hestraints  on  bankers — Adulteration — Technical  education — 
Scmitary  restraints, 

"  Homo  homini  lupus, ^'  said  Plautus,  perhaps  Demopliilus,  from  whom 
he  borrowed  the  Asinaria.  This  is  the  comment  in  which  the 
historical  r,elations  of  man  to  man  have  been,  in  the  practice  of 
hfe,  and  by  the  observation  of  publicists,  condensed.  You  will 
notice  that  the  aphorism  is  universal.  It  is  not  directed  against 
the  selfish  spirit  of  competition,  or  the  arid  cynicism  of  the  meta- 
physical economist,  or  the  tyranny  of  capital,  or  the  aggressions  of 
labour ;  but  against  the  dangers  of  civil  society,  the  risks  which 
communities  and  individuals  incur  from  fraud  or  force,  or  a  combi- 
nation of  both.  It  applies  to  monarchs  who,  like  Philip  11.  or 
Louis  XIV.,  or  Napoleon,  aimed  at  Universal  Empire,  and  to  Vikings, 
pirates,  buccaneers,  and  heroes  generally.  It  is  equally  true  of 
criminals  who  pursue  gain,  and  of  statesmen  who  pursue  glory, 
generally,  it  must  be  confessed,  with  an  eye  to  the  purely  criminal 
motive.    Even  the  instinct  of  domestic  duty,  the  education  in  the 


342        LAISSEZ  FAIBIH  :   ITS  OBIGIN  AND  EISTOBY. 

sacredness  of  family  ties,  is  no  efficient  guarantee  against  predatory 
impulses.  "The  price  of  liberty,"  said  Mr.  Mill,  "is  eternal 
vigilance."  But  it  is  true  of  everything  else  which  is  worth  keep- 
ing, and  therefore  worth  stealing,  or  otherwise  appropriating.  The 
economist,  who  takes  no  notice  of  the  selfishness  with  which  aggres- 
sive rulers  and  statesmen  cover  their  action,  is  constrained  to 
identify,  too  often,  the  hero  with  the  burglar,  the  minister  of  religion 
with  the  buccaneer.  In  point  of  fact,  the  two  who  have  in  past 
times  accepted  the  alternate  occupation,  have  also,  with  a  clear 
knowledge  of  the  fact,  been  mentioned  with  eulogy  in  their  own 
generation,  and  have  had  the  benefit  of  some  contemporary 
Smiles. 

The  weakness  of  the  social  unit,  however  strong  he  is  when 
matched  with  any  one  of  his  fellows,  however  shrewd  he  may  be  at 
^,  a  bargain,  however  successful  he  may  be  in  the  conduct  of  business, 
'^V'^  is  so  marked,  and  so  readily  confessed  by  himself,  that  every  one 
^^  admits  the  necessity  of  a  government  which  shall  protect  the  weak 
^  /  A  ^g^iiist  the  strong,  which  shall  punish  the  violence  of  foreign  and 
> .  /  '  domestic  foes  to  the  best  of  its  ability,  which  shall  arbitrate  equit- 
ably between  contending  interests,  whether  the  contest  is  one  of 
general  principles  or  of  particular  details,  which  shall  chastise  the 
highest  offender  as  well  as  the  lowest,  and  shall  be  entirely  impartial. 
Above  all  things,  this  government  has  to  abstain  from  allowing  its 
powers  to  be  utilized  for  particular  interests,  and  against  the  general 
good.  Even  when  it  has,  to  the  best  of  its  judgment,  formulated  a 
law,  it  should  remember  the  maxim,  summumjiis  summa  injuria,  and 
modify  in  practice  the  generality  which  it  sanctions.  It  is  perfectly 
true  that  unless  contracts  are  enforced,  society  becomes  a  chaos  of 
universal  distrust.  It  is  plain  that  men  are  very  slow  to  learn  the 
obligation  of  paying  what  is  due,  especially  when  the  article  or  ser- 
vice which  is  conceded,  on  the  understanding  that  the  price  must 
be  refunded,  and  profit  or  interest  paid,  has  served  its  immediate 
turn.  This  insensibility  to  the  obligation  of  a  just  debt,  occasionally 
exhibited  in  our  own  experience,  is,  I  do  not  doubt,  the  explanation 
of  the  excessive  severity  with  which  contracts  are  enforced  under 
the  codes  of  an  early  civilization,  the  Draconian  legislation  and  the 
laws  of  the  Twelve  Tables.  To  be  sure,  in  time,  it  is  found  neces- 
sary to  relax  the  rigour,  and  to  modify  the  contract,  occasionally  to 


THE  WEAKNESS  OF  THE  SOCIAL  UNIT.  843 

rescind  it.  But  no  rational  person  ever  doubts  that  the  law  should, 
as  a  rule,  enforce  contracts.  So  convinced  was  the  great  analyticrd 
philosopher,  Aristotle,  that  the  centre  of  civil  government  is  the 
satisfaction  of  contracts,  that  he  makes  even  crimes  to  be  involuntary 
contracts,  in  which  the  State  should  compensate  the  injured  party 
at  the  expense  of  the  criminal. 

The  State,  then,  is  bound  to  enforce  contracts.  But  it  is  also 
entitled,  indeed  is  equally  bound,  to  declare  what  contracts  it  will 
enforce.  In  all  civilized  societies,  for  instance,  it  refuses  to  recog- 
nize contracts  under  which  one  of  the  parties  agrees  to  sell  himself, 
or  members  of  his  family  who  are  iu  his  power,  as  a  slave  or  slaves. 
We  treat  the  traffic  in  human  beings  as  piracy,  and  punish  it  as 
such,  or  profess  to  do  so.  Again,  a  contract  based  on  a  criminal 
proceeding  is  not  only  void,  but  punishable.  An  arrangement 
by. which  a  burglar  engaged  to  sell  his  plunder  to  a  tradesman 
would  not  only  be  avoided  ab  initio^  but,  if  detected,  would  bring 
thief  and  receiver  under  equal  penalties.  Where  a  contract  is  based 
on  an  immoral  consideration,  it  is  also  void.  Contracts  which  are 
shown  to  come  under  what  is  called  the  restraint  of  trade  are  void- 
able. Contracts  which  create  perpetuities  are  said  to  be  contrary 
to  legal  policy,  though  the  practice  of  courts  has  not  been  consis- 
tent. In  many  cases,  certain  contracts  are  declared  illegal.  Thus 
a  landlord  cannot  include  income  tax  in  rent,  cannot  compel  his 
tenant  to  preserve  ground  game,  cannot  determine  a  tenancy  arbi- 
trarily. 

In  the  same  manner  the  State  modifies  contracts,  or  interprets 
them  equitably.  Nothing  can  be  more  complete  than  the  transfer 
of  a  mortgagor's  estate,  when  he  fails  to  fulfil  the  conditions  of  re- 
paying money  lent,  and  interest  due,  to  the  mortgagee.  But  the 
law,  from  the  time  of  Chancellor  EUesmere,  in  James  I. 's  reign,  has 
stepped  in,  and  secures  the  mortgagor  his  equity  of  redemption. 
Eecently,  the  usury  laws  have  been  entirely  abolished.  But  the 
law  relieves  a  borrower,  who  is  in  expectancy  of  a  life  interest  in 
land,  from  an  oppressive  or  usurious  debt.  Unfortunately  these  acts 
of  equity  or  generosity  are  limited  to  certain  favoured  classes.  The 
interest  of  the  Irish  tenant,  though  declared  his  own  in  law,  is  not 
secured  to  him  after  eviction  on  the  non-payment  of  rent,  though 
its  market  value  may  be  greatly  in  excess  of  the  rent  due.     A  dis- 


344        LAISSEZ  FAIBE  :  ITS  OBIGIN  AND  HIST0B7, 

tinguislied  statesman  has  latterly  shown  himself  to  be  very  ill- 
informed  on  this  subject.  But  distinguished  statesmen  are  very  apt 
to  be  ill-informed  in  particulars.  They  should  be  criticized  with 
much  consideration,  for  foolish  folk  insist  on  their  being  omniscient, 
and  with  the  natural  consequences. 

In  brief,  the  State  must  protect  the  weak  against  the  strong,  not 
only  by  national  defences  on  sea  and  land,  by  police  against  domes- 
tic violence,  by  the  mechanism  of  criminal  justice  against  some 
offenders,  and  by  the  agency  of  civil  justice  against  torts ;  but  by 
what  is^lmost  as  important,  by  just  legislation,  and  by  just  interpre- 
tation of  that  legislation.  The  American  Constitution  even  protects 
its  citizens  against  legislation  which  is  asserted  to  be  just,  for  the 
Supreme  Court  can,  on  appeal,  reverse  and  annul  an  act  of  the 
Federal  Legislature  which  it  declares  to  be  unconstitutional.  In  an 
ideal  State,  the  legislature,  the  administration,  and  the  courts  would 
unite  in  enforcing  what  the  highest  human  intelligence  could 
declare  to  be  absolute  equity.  The  duty  of  the  State  is  admirably 
expressed  in  the  oath  of  the  Manx  judges  that  the  deemster, 
as  they  call  him,  will  decide  as  evenly  between  parties  as 
the  backbone  lies  in  a  herring.  These  honest  islanders 
gathered  their  similitude  from  the  fisheries  which  form  their 
staple  industry,  and  were  assured  that  the  reminder  would  be 
perennial. 

Unfortunately,  the  absolute  fulfilment  of  these  great  public  duties 
is  an  ideal.  No  one  has  ever  seen  a  set  of  human  institutions  which 
have  been  entirely  just,  in  which  no  undue  advantage  was  given  to 
any  class,  trade,  or  calHng,  in  which  public  burdens  are  evenly  dis- 
tributed, in  which  complete  fairness  has  been  the  rule.  It  has  over 
and  over  again  been  admitted  thei  a  change  which  has  been  de- 
manded is  intrinsically  just,  but  that  interests  have  grown  up  about 
irregular  and  indefensible  practices,  which  it  would  be  highly  in- 
jurious to  annul  or  even  to  frighten.  Persons  have  even  held,  and 
economists  among  them— I  do  not  challenge  their  conclusion — that 
in  course  of  time  an  initial  wrong  becomes  a  subsequent  right,  which 
must  not  be  questioned.  I  shall,  in  a  subsequent  lecture,  illustrate 
what  I  mean,  when  I  deal  with  the  subject  of  Crown  lands,  and  the 
ancient  practice  of  resumption.  It  has  been  even  alleged  that  con- 
tinuous wrongs  on  others  become  in  time  the  rights  of  the  wrong- 


THE  IDEAL  OF  GOVEBNMENT.  845 

doer.  The  late  Lord  Palmerston  had  a  favourite  adage,  that  tenant 
right  was  landlord  wrong,  though  the  maturer  conscience  of  the 
British  Parhament,  shortly  after  Palmerston' s  death,  determined, 
in  1870,  at  least  to  modify  this  position.  So  in  1820.  Lord  Liver- 
pool declared  that  he  entirely  and  cordially  concurred  with  every 
principle  and  every  sentiment  in  the  Merchants'  Petition.  But  he 
could  hold  out  no  prospect  of  great  or  immediate  alteration,  because, 
as  he  alleged  among  the  reasons,  *'  So  many  vested  interests  had 
grown  up  in  the  country,  which  he  imagined  would  be  imperilled  " 
by  accepting  and  acting  on  the  principles  of  the  petition.  The 
objection  is  a  very  old  one,  for  it  was  adduced  by  Demetrius  in  the 
theatre  of  Ephesus.  The  majority  of  the  House  of  Commons 
shouted  their  sympathy  with  the  worthy  silversmith  of  the  nine- 
teenth century. 

The  fact  is,  the  practice  of  parliaments  and  governments  has 
differed  widely  from  what  each  would  admit  to  be  the  raison  d'etre 
of  their  existence.     All  the  forces  of  government  have  been  diverted 
from  time  to  time  towards  the  sustentation  of  particular  interests, 
and  not  a  few  of  them  are  still  diverted,  so  hard  is  it  to  reconcile  the 
conflicting  claims  of  conscience  and  self-interest,  of  the  public  good 
and  private  advantage.     I  always  treat  the  arguments  of  those  who, 
being  interested,  sometimes  greatly  interested  parties,  defend  what 
my  convictions  and  my  experience  prove  to  me  to  be  indefensible, 
with  patience  and  consideration,  for  I  know  nothing   more   diffi* 
cult  than  to  get  a  person,  all  of  whose  interests  lie  in  one  direction, 
to  accept  the  disagreeable  necessity  of  examining  facts,  and  finally 
of  going  in  a  just  direction.     I  should,  had  I  lived  in  old  days,  have, 
in  this  frame  of  mind,  excused  the  bias  of  those  ruined  landlords 
who  devised  the  labour  statutes;  of  those  adventurous  spirits  who 
claimed  trade  monopolies ;  of  the  restored  royalists  who  created  our 
present  land  system ;  of  the  merchants  in  the  last  century,  who, 
essaying  that  enormous  novelty  to  the*  English  people,  mechanical 
invention,  demanded  that  their  venture  should  be  guaranteed  by 
protection ;  of  those  patriotic  persons,  who,  having  founded  the 
Bank  of  England,  and  restored  the  finances  of  the  country  at  a 
most  critical  time,  claimed,  and  obtained,  the  benefit  of  that  cur- 
rency law,  in  accordance  with  which  the  second  charter  of  the  Bank 
of  England  was  granted.     There  were  plausible  arguments  for  each 


846       LAISSEZ  FAIBE  :  ITS  OBIGIN  AND  BI8T0BY, 

of  these  departures  from  true  and  just  principles.  There  were 
people,  when  these  concessions  were  made,  who  recognized  that 
the  good  which  the  favoured  objects  of  this  legislation  secured 
was  infinitesimal,  even  to  them,  was  in  some  cases  even  ruinous, 
and  that  the  evil  which  they  inflicted  on  the  rest  of  the  people  was 
great  and  permanent.  Had  I  known  what  I  know,  I  should  have 
resisted  the  proposal  in  each  and  every  case  as  a  disinterested  person, 
and  should,  no  doubt,  have  incurred  much  obloquy.  But  I  do  not 
think  it  can  justly  be  inferred  that  a  man  is  deliberately  dishonest  be- 
cause he  cannot  see  the  public  interest  as  clearly  as  he  can  see  his 
own.  If  his  own  interest  in  the  end  is  to  be  superseded,  one  may 
leave  him  the  privilege  of  protest,  and  the  utterance  of  discontent, 
with  a  hope  that  matters  will  not  turn  out  as  serious  as  the  subjects 
of  the  change  anticipate. 

The  fact  is,  there  is  a  plausible  argument  which  may  be  alleged 
for  many  of  the  most  serious  errors  which  governments  have 
incurred,  and  many  of  the  most  serious  injuries  which  they  have 
unwittingly  inflicted.  Half  or  partial  truths  are  the  bane,  the 
ignesfatui  of  political  life,  and  by  implication  of  political  economy. 
It  has  been  for  many  years  my  practice  to  point  out  that  most  of 
the  economic  errors  or  fallacies  into  which  people  fall  have  a 
certain  basis  of  truth  in  them.  Whatever  they  may  effect  in  the 
end,  they  are  not  in  the  beginning  mere  impudent  brigandage. 
The  most  selfish  of  rulers,  the  last  Henry  and  the  second  Charles, 
did  not  seriously  design  the  dishonour  and  ruin  of  the  unhappy 
country  which  they  governed.  The  sordid  managers  of  the  Re- 
formation, the  sordid  patriots  of  the  R3volution,  did  not  want  to 
do  mischief,  though  they  could  not  help  doing  it.  Somerset  plun- 
dered the  poor,  but  perhaps  he  thought  that  a  purer  faith  was 
a  full  compensation  for  their  losses.  Leeds  and  Seymour,  Maccles- 
field and  Walpole,  and  a  host  of  others  robbed  the  taxpayer  and 
enriched  themselves,  but  per  baps  concluded  that  their  gains  were 
a  cheap  price  for  the  inestimable  boon  of  the  Revolution  and  the 
Hanoverian  succession.  In  most  men,  especially  in  those  who 
must  be  trusted,  good  and  evil  are  strangely  mixed,  and  they  are 
themselves  very  often  entirely  unconscious  of  the  mixture.  Chve, 
you  will  remember,  amassed  an  enormous  fortune  in  India  at  an 
early  age,  and  within  a  few  years.    He  afterwards  declared,  perhaps 


HALF  TBUTH8.     THE  ECONOMISTS  OF  FBANCE,      347 

with  perfect  sincerity,  certainly  with  a  proud  consciousness,  that 
he  was  amazed  at  his  own  moderation. 

Now  towards  the  end  of  the  first  half  of  the  eighteenth  century 
a  body  of  Frenchmen,  who  called  themselves  Economists,  or 
Physiocrats,  struck  with  the  infinite  misery  to  which  France  had 
been  reduced,  partly  from  the  expedients  of  Colbert,  partly  by  the 
extravagant  wars  of  Louis  XIV.,  the  more  extravagant  misconduct 
and  profligacy  of  the  Regency,  and  of  Louis  XV.,  determined  on 
examining  into  the  causes  of  wealth  and  poverty,  of  waste  and 
beggary,  especially  in  France,  where  the  contrast  was  violent. 
The  eighteenth  century,  as  you  are  doubtless  aware,  was  one  in 
which  people  were  beginning  to  inquire  into  the  foundations  of 
authority,  and  of  the  power  which  authority  claimed  as  its  due. 
The  bitterness  of  religious  feuds  had  worn  itself  out.  It  is  true 
that  after  a  scandalous  youth  and  middle  age  Louis  XIV.  became 
devot  in  his  later  years,  and  signalized  his  piety  by  persecuting  the 
Huguenots,  expelling  them  from  France,  and  rooting  out  the 
Camisards.  But  all  pretence  to  propriety,  and  all,  or  nearly  all, 
the  homage  of  bigotry,  passed  away  with  the  regency  of  the  Duke 
of  Orleans  and  the  administration  of  Dubois.  In  England  tolera- 
tion was  followed  by  apathy,  apathy  by  inquiry,  inquiry  by  scep- 
ticism. The  Puritans  of  the  first  Revolution  became  the  Unitarians 
of  the  early  eighteenth  century,  the  fierce  Churchmen  of  the 
Restoration  the  Latitudinarian  divines  of  the  first  Georgian  era. 
The  ancient  orthodoxy  was  conceived  to  be  disaffected,  and  perhaps 
Bolingbroke,  who  was  above  all  an  intriguer,  wished  to  show  that 
a  man  could  be  a  Tory,  even  a  Jacobite,  and  withal  a  freethinker. 
In  France  the  very  foundations  of  society  were  discussed.  There, 
topics  long  reputed  too  sacred  for  handling  were  freely  and  scep- 
tically criticized.  During  the  long  and  peaceful  administration 
of  Fleury,  the  Court  became  more  scandalous,  France  more  adven- 
turous, the  merchants  and  manufacturers  richer,  and  the  peasantry 
more  beggarly.  The  economists,  with  many  errors  in  prmciple 
and  detail,  were  thorough.  They  did  not  quarrel  with  the  Govern- 
ment ;  but  they  severely  criticized  what  I  may  call  the  control  of 
French  industry,  and  especially  agriculture  by  the  administra- 
tion. They  concluded  that  private  and  personal  interests,  as  long 
as  they  were  irmocent,  were  judged  of  better  by  the  individual  than 


348       LAIS8EZ  FAIBE  :  ITS  OBIGIN  AND  HIST0B7. 

they  can  be  by  the  State,  that  if  men  were  left  free  to  work,  free 
to  bargain,  free  to  trade,  the  result  would  be  that  in  the  choice  of 
industry  the  fittest,  to  use  a  modern  phrase,  would  be  selected,  and 
that  the  country  would  prosper  much  more  under  competition  than 
it  had  done  under  regulation.  In  a  word,  they  afl5rmed  that  laissez 
faire  should  be  the  rule  of  an  economic  society.  Smith,  who  was 
travelling  in  France  as  tutor  to  the  young  Duke  of  Buccleuch,  the 
descendant  of  Monmouth  and  of  the  considerable  heiress  to  whom 
Monmouth  was  married,  said,  "  I  was  attracted  by  three  philo- 
sophers, and  influential  people  they  were — Turgot,  Quesnai,  and 
the  elder  Mirabeau;"  and  after  his  return  to  England  composed,  to 
a  great  extent  on  their  principles,  *'  The  Wealth  of  Nations." 

It  was  a  great  advantage  to  the  Economists  that  their  doctrines 
were  accepted  as  sound  in  the  abstract,  however  difficult  it  might 
be  to  allow  them  in  practice.  It  is  quite  probable  that  the  greatest 
profligate  living  would  admit  privately  that  the  Ten  Command- 
ments are  excellent  in  the  abstract,  the  Sermon  on  the  Mount  an 
admirable  exhibition  of  theoretical  virtue,  but  that  vested  in- 
terests compel  the  hearer  of  them  to  limit  his  acceptance  within 
the  bounds  of  respectful  admiration.  The  tenets  of  the  French 
Economists  were  listened  to  with  speculative  acquiescence,  but 
Pompadour  and  Du  Barry  prevented  their  acceptance  in  state- 
craft. They  were  out  of  the  range  of  practical  politics.  By  and 
by  came  the  cataclysm,  in  which  everything  was  submerged  in  a 
common  ruin,  the  residue  of  the  Economists,  of  the  Encyclo- 
paedists, of  the  dilettante  statesmen,  of  the  financiers  and  the 
harlots,  king  and  church. 

The  English  version,  or  rather  comment  of  Adam  Smith  on  this 
new  departure,  was  the  beginning  of  a  new  era.  The  publication 
of  the  great  work  was  delayed,  as  I  have  recently  discovered,  by 
some  negotiations  which  were  undertaken  by  Pulteney  with  the 
East  India  directors  to  get  Smith  an  office  in  the  Bengal  Council. 
They  failed,  and  to  their  failure  we  owe  the  publication  of  *'  The 
"Wealth  of  Nations,"  which  would  never  have  seen  the  light  had  he 
obtained  the  appointment.  Mickle,  who  translated  the  "Lusiad"  of 
C'amoens,  and  dedicated  it  to  the  company,  thought  it  would  suit 
kis  patrons  if  he  reviled  Adam  Smith,  who  reflects  rather  plainly 
on  the  East  India  Company's  trade  policy.     But  the  opinions  of 


TEE  WEALTH  OF  NATIONS,    QBADUAL  BEFOBMS.    349 

the  author  gained  him  the  respect  of  the  younger  Pitt  who,  after 
ousting  Fox  on  an  India  Bill,  brought  in  nearly  the  same  measure 
himself,  and  gave  a  striking  and  early  example  of  that  policy  with 
which  expectant  statesmen  rail  at  measures  when  they  are  in 
opposition,  and  adopt  them  when  they  are  in  office.  For  a  time 
it  seemed  that  Pitt  would  not  only  accept  the  theory,  but  put  in 
practice  the  tenets  which  Adam  Smith  inculcated.  But  the  French 
Revolution  came,  and  Pitt,  after  a  struggle,  threw  in  his  lot  with 
the  emigres  and  the  Bourbons  and  the  affrighted  herd  of  kings 
and  kinglets.  He  died  of  chagrin,  having  at  his  death-bed  the 
affectionate  sympathy  of  his  king  and  the  spiritual  consolations 
and  offices  of  his  bishop,  one  Tomline. 

This  is  not  the  occasion  on  which  to  go  through  the  history  of 
the  long  delay  which  attended  the  acceptance  of  the  principle 
laissez  faire.  It  reappeared,  as  I  have  told  you,  in  the  Merchants' 
Petition,  was  accepted  in  the  abstract  by  Liverpool,  and  cautiously 
adopted  in  the  concrete  by  Huskisson  and  Canning.  The  trade 
in  bullion  and  the  foreign  exchanges  were  relieved  from  vexatious 
restrictions,  while  the  national  honour  was  maintained  unimpaired 
in  the  integrity  of  the  currency.  Next  the  laws  regulating  labour 
were  swept  away.  Next  an  inroad  was  made  on  the  taxation  of 
raw  materials,  and  on  some  peculiarly  vexatious  excises.  As  time 
went  on,  trade  was  freed  from  monopolies.  Then  the  most 
grotesque  tariff  conceivable  was  greatly  altered.  Then  the  most 
important  of  all  raw  material,  food,  was  liberated  from  selfish 
attempts  to  regulate  its  price  in  the  interest  of  landowners.  The 
shreds  of  colonial  preference  went  shortly  afterwards.  All  but  one 
of  the  materials  of  human  labour,  land,  have  been  made  free. 
This  is  still  stifled  by  protective  regulations.  But  the  system  is 
breaking  down  from  its  own  inherent  perversity,  folly,  and  mis- 
chief. Laissez  faire  became  triumphant,  and  this  in  little  more 
than  a  quarter  of  a  century.  I  can  well  remember  the  last  struggle 
against  it.  The  advocates  of  the  old  system  were  first  very  con- 
temptuous, next  very  angry,  then  very  ill-tempered,  and  lastly, 
very  ill-mannered.  But  the  bravest  act,  and  that  which  disarmed 
opposition  more  than  anything  else,  was  the  resolution  taken  to 
break  the  weapon  with  which  the  victory  was  won.  The  League 
which  enforced  the  repeal  of  the  Corn  Laws  was  dissolved  as  soon 


350       LAISSEZ  FAIBE  :   ITS  OBIGIN  AND  HIl^TOBY, 

as  the    Legislature    had    swept    those  acts    from    the    Statute 
Book. 

But  complete  as  this  victory  was,  it  was  soon  found  that  laissez 

faire  was  not  a  panacea  for  all  social  mischiefs.     Much  of  the  evil 

which  afflicts  society  is  due  to  causes  whose  effects  survive  and  are 

profoundly  noxious  long  after  the  cause  has  ceased  to  be  operative, 

and  even  has  been .  forgotten.     The  maxim,  Cessante  causa  cessat 

fffectus,  is  only  partly  true  in  the  physical  world,  where  the  energy  of 

a  transient  cause  may  have  permanent  effects.  The  desolation  of  parts 

of  Calabria  have  been  prolonged  since  the  earthquake  of  1782  to  our 

own  day.   In  the  political,  the  economical,  the  moral  world,  effects 

long  survive  causes.    The  prolonged  survival  of  effects  is  the  centre 

of  Mr.  Darwin's  theory.     The  publicist  affirms  that  precedents  are 

valid  long  after  their  occasion  has  passed  away.     The  historian, 

philosopher,  constitutional  or  romantic,  white,  grey,  and  black, 

is  fond  of  tracing  present  phenomena  to  ancient  beginnings,  even 

if  he  refrains  from  connecting  British  institutions  with  the  call  of 

Abraham.     The  laws  regulating  wages,  the  justices'  assessment, 

and  parochial  settlement,  the  old  Poor  Law,  the  new  Poor  Law,  the 

Corn  Laws,  have  left  marks  on  labour  for  which  the  doctrine  and 

I  I   practice  of  laissez  faire  is  no  detergent,  even  though  it  were  adver- 

I  I    tised  as  copiously  as  the  soaps  of  our  day  are.     You  cannot,  like 

I  \    the  adventurer  in  the  Greek  comedy,  take  the  nation  and  by  some 

j    magic  bath  restore  it  from  decrepitude,  disease,  vice,  dirt,  drunken- 

'    ness,   and  ignorance,   to  manliness,   health,  virtue,  self-respect, 

sobriety,  knowledge,  forethought,  and  wisdom  by  a  mere  wash. 

Some  of  us  who  have  essayed  remedial  measures  have  found  that 

we  have  not  in  the  schoolmen's  phrase,  materia  prima  to  deal  with. 

j^Our  progenitors  in  the  art  of  legislation  have  left  us  their  failures 

'    to  remedy,  as  well  as  our  own  work  to  do.     We  have  to  clear  away 

the  effects  of  old  wrong-doing.     Half  of  our  legislation,  more  than 

half,  is  remedial,  not  of  what  is  the  genuine  present,  but  of  the 

historical,  the  inveterate  past.     It  is  only  when  yoji  learn  the  past 

■  that  you  cease  to  be  impatient  at  tBe'present.     If  you  would  ^o 

well  in  yout  ihterpretatidn  you  inust  hoibe  3^terred  by  the  long 

.chain  of  causes,  for  every  discovery  aids  your  remedy. 

Laissez  faire  y  then,  is  no  more  than  natural  justice  postulating  the 
absolute  and  entire  freedom  of  all  contracting  parties,  in  wdiich  all 


LAISSEZ  FAIBE  NO  PANACEA.  851 

the  agents  are  fairly  ^qual  in  their  competency  to  interpret  their 
own  interests,  and  give  effect  to  their  interpretation,  being  of 
course  constantly  corrected  by  other  interests,  which  they  equit- 
ably balance  against  their  own.  I  need  hardly  say,  that,  at  the 
best  of  times,  it  is  as  ideal  as  the  legislative  and  administrative 
body  which  we  heard  of  just  now.  It  is  almost  as  superfluous  to 
point  out  that,  if  it  existed,  it  would  so  curtail  the  functions  of  the 
legislature,  that  we  might  leave  all  debates  to  the  two  front  benches, 
who  might  discuss  those  questions  which  Milton  referred  to  Limbo, 
and  Swift  to  the  grimy  philosophers  of  Laputa.  The  chance  of 
mending  society  by  laissez  fairer  is  as  rare  as  the  capture  of  the 
golden  bough.  Is  it  entirely  without  a  meaning,  when  Virgil  tells 
us  that  the  lucky  acquisition  only  gives  us  an  introduction  to  Proser- 
pine ?  And  yet  there  is  a  select  body  of  speculative  philosophers,  with 
Lord  Wemyss  at  their  head,  who  seem  to  be  as  far  away  from  the 
facts  as  their  president  was,  when  he  tilted  at  the  Eglinton  tourna- 
ment, and  dreamed  of  a  revival  of  chivalry,  which  I  fear,  and  I 
have  read  the  private  accounts  of  the  chevaliers — was  the  most 
pretentious  of  shams. 

As  laissez /aire  cannot  do  all,  it  will  be  well  to  point  out  where  it 
totally  fails,  and  always  must  fail  before  we  come  to  more  debat- 
able ground.  And  here  I  may  say  that  so  enthusiastic  have  been 
some  advocates  of  the  doctrine,  that  they  would  have  applied  it 
without  discrimination  to  every  economical  fact.  Thus  Malthus 
would  have  extinguished  all  rehef  to  destitution,  Newmarch  all 
diplomacy  on  trade,  while  Mr.  Herbert  Spencer  carries  the  doctrine 
of  individualism  so  far  that  I  remember  him  lamenting  the  exces- 
sive police  protection  which  the  law  accords,  as  he  thought,  to  the 
average  Englishman.  I  need  hardly  say  that  these  are  idola 
specus,  the  speculations  of  an  armchair  and  easy  circumstances.    . 

In  the  first  place,  then,  as  you  will  anticipate,  the  application  of 
the  doctrine  laissez /aire,  laissez  alleVf  iB  impracticable  in  cases  where 
the  present  situation  is  directly  traceable  to  the  action  of  that  govern- 
ment or  administration  which  has  been  permitted  or  encouraged  to 
commit  the  mischief.  No  question  is,  indeed,  more  difficult  in  the 
whole  range  of  the  ethics  of  social  life  than  the  modern  doctrine  of 
vested  interests.  It  is  obvious  that  if  we  were  to  extend  the 
principles  which  some  persons  have  laid  down,  that  we  must  per- 


; 


852       LAIS8EZ  FAIRE  :  ITS  OBIGIN  AND  EISTOBY. 

Bist,  even  in  the  near  prospect  of  national  ruin,  in  continuing  what 
we  have  once  allowed.  If  Charles  II.,  for  example,  had  given  the 
son  of  Louisa  Querouaille,  French  prostitute  and  spy,  the  whole 
revenue  of  the  Crown,  we  should  be  obhged  to  go  on  paying  the 
proceeds  to  the  Duke  of  Eichmond.  If  it  be  true  that  the  bounty 
and  the  Corn  Laws,  as  many  contended,  were  as  much  the  inherit- 
ance of  the  English  landowner  as  his  acres  were,  no  reforms  could 
have  been  permitted.  If,  on  the  other  hand,  maintenance  out  of 
the  rates  were,  as  was  alleged,  the  absolute  right  of  the  British 
labourer,  in  consideration  of  his  having  been  ousted,  without  com- 
pensation, from  his  commonable  rights  in  the  land,  occupiers 
would  have  been  bound  to  keep  paupers  until  they  became 
paupers  themselves.    No  reform  in  our  social  system  could  he\ 

\  possible  if  full  play  were  given  to  the  doctrine  of  vested  interests  J 
Fortunately,   as  yet,   the   claim  is   seriously  affirmed,   some  few 
cases  excepted,  in  the  case  of  life  interests  only,  and  in  some  of 
these  only,  such  being,  as  a  rule,  intrinsically  the  least  defensible. 
But  I  shall  have  to  return  to  this  subject  in  another  lecture. 

The  most  marked  of  these  cases  in  which  laissez  /aire  breaks  down 

"  is  in  the  case  of  the  working  classes.  I  have  pointed  out  to  you, 
from  the  indisputable  facts  of  economical  history,  that  the  beggary 
of  the  working  classes  was  the  direct  and  deliberate  work  of  the  legis- 
lature, and  that  it  is  excessively  difficult  to  retrieve  the  fortunes  of 
these  people  by  the  principle  of  free  competition,  and  by  their  own 
collective  efforts.  But  the  utmost  freedom  should  be  given  to  those 
efforts,  the  fullest  sympathy  should  be  accorded  to  them,  the 
kindliest  criticism  should  be  given  to  their  errors  and  failures,  and, 
beyond  all,  they  should  be  allowed  to  witness  no  class  privileges, 

^  bestowed  and  fenced  for  their  more  fortunate  fellow  countrymen, 
in  the  struggle  of  life.  The  strength  of  socialism  is  the  injustice  of 
government,  it  is  weakened  by  every  act  of  equity,  and  becomes  an 
extinct  or  at  least  dormant  force,  when  all  rights  are  respected. 

•^  I  have  a  great  aversion  to  legislation  on  behalf  of  adult  labour, 
except,  of  course,  when,  as  in  the  Employers  Liability  Act,  the 
abominable  doctrine  of  common  employment,  a  mere  fiction  of 
judges,  had  to  be  extinguished.  But  I  entertain  this  aversion,  not 
because  I  hold  that  the  legislature  may  not  be  bound  to  compen- 
sate in  the  present  for  wrongs  in  the  past,  but  because  I  am 


TBE  CASE  OF  TEE  WOBKING  CLASSES,  853 

convinced  that  concerted  action  is  a  far  more  remedial  measure 
than  legislative  restitution.  In  the  fifteenth  century,  and  in  the 
teeth  of  restraining  statutes,  the  workmen  secured  an  eight-hours 
day.  I  am  sure  that  an  eight-hours  day  is  worth  more  to  the 
employer  than  a  ten-hours  day,  is  cheaper  at  the  same  money. 
But  I  would  far  rather  that  the  workmen  got  it  by  their  own 
combinations,  and  by  their  own  exertion,  than  by  a  gift  of  the 
legislature. 

There  are  some  services  the  price  of  which  must  be  controlled. 
A  railway,  for  instance,  has  over  a  given  district  a  monopoly  of 
conveyance  for  passengers  and  goods  conferred  upon  it  by  the 
legislature.  It  is  true  that  Parliament  never  surrenders,  and  I 
trust  never  will  surrender,  the  right  of  permitting  competition. 
But  in  practice  it  declares  against  competition,  when  it  permits  im- 
perilled companies  to  appear  by  counsel  against  new  projects.  It 
does  this  for  two  reasons.  In  the  first  place,  it  is  quite  alive  to  the 
famous  dictum  of  the  younger  Stephenson,  that  where  combination 
is  possible,  competition  fails ;  and  it  next  knows,  in  the  light  of  this 
fact,  that  if  it  permits  unnecessary  rivalry,  its  still  more  important 
right,  that  of  regulating  rates  and  fares,  is  in  peril  It  is  to  h& 
presumed  that  the  railway,  having  been  permitted  to  come  into 
existence  for  the  profit  of  its  shareholders,  has  a  right  to  make 
profit.  But  if  it  is  to  share  a  limited  profit  with  a  rival,  it  must, 
in  all  likelihood,  both  in  the  stage  of  competition  and  in  that 
of  combination,  make  less  profit.  But  less  profit  can  be  supple- 
mented only  by  less  cost,  or  by  slower  and  scantier  accommo- 
dation, or  by  higher  rates.  The  first  will  be  shared  by  all  the 
competitors,  the  latter  are  achieved  by  the  inconvenience  and  cost 
of  the  customer. 

When,  in  1886,  the  Railway  Rates  Bill  came  before  the  House  of 
Commons,  and,  in  my  opinion,  the  projected  changes,  passionately, 
but  not  over  wisely,  demanded  by  landowners  and  manufacturers, 
seemed  to  me  to  be  likely  to  injure  the  railway  projectors  first, 
and  would  infallibly  in  the  end  react  on  the  public,  I  spoke  in 
the  House  as  follows :  "  The  carriage  of  goods  and  passengers 
should  first  pay  tlie  unprofitable  costs  or  working  expenses,  and, 
secondly,  should  yield  a  profit  on  the  trafiic.  If  the  freight  of  the 
former  did  not  cover  cost,  the  shareholders  must  suffer,  or  the 

24 


854       LAISSEZ  FAIRE  :   ITS  OBIGIN  AND  HI8T0BY, 

conveyance  of  the  latter  must  be  rendered  dearer.  But  mucli  of 
the  travelling  on  railways  is  voluntary,  and  an  excessive  fare 
"would  check  business.  Now  if  profits  were  seriously  curtailed, 
one  cannot  expect  that  railway  proprietors  can  carry  goods  at 
a  loss,  or  at  no  remuneration.  You  are  then,"  I  argued,  *'in  a 
vicious  circle.  You  have  a  right  to  regulate  rates  and  fares,  but 
you  must  do  so  with  a  view  of  leaving  a  margin  of  profit.  Your 
clients  wish  to  save  some  of  the  costs  of  freight.  But  if  you  have 
established  a  set  of  conditions  under  which  you  cannot  seriously 
reduce  cost  without  extinguishing  profit,  you  will  assuredly 
find  in  the  end,  that  you  were  better  off  under  the  old  system 
tham  you  will  be  under  the  new."  The  Government  expected  that 
I  should  move  the  rejection  of  the  Bill.  As  it  was  sure  not  to  pass, 
I  thought  this  action  superfluous.  But  I  am  quite  convinced  that 
legislation  is  necessary.  Perhaps  some  compensation  should  be 
made  to  railways  in  view  of  the  great  value  which  they  have  given  all 
land,  and  to  some,  enormous  value,  and  this  at  the  expense  of  those 
who  have  been  benefited  by  no  outlay  of  their  own,  and  sometimes 
after  preposterous  compensation  for  disturbance.  It  is  not  unfair  to 
fix  the  price  at  which  a  monopoly  of  service  shall  be  accorded,  but 
this  restraint  should  precede  the  grant  of  the  monopoly,  and  be  very 
cautiously  exercised  afterwards.  If  you  fix  the  price,  or  better  still, 
require  the  agent  to  fix  the  price,  and  abide  by  it  at  his  peril,  and 
leave  the  person  to  undertake  the  service  or  leave  it  alone,  you  do  no 
■wrong.  A  cabman  is  not  wronged  when  his  mileage  price  is  fixed, 
nor  is  any  other  person  who  is  granted  a  monopoly,  actual  or  regu- 
lated, for  he  can  take  the  calling  or  leave  it  alone.  It  is  quite  a 
different  thing  when  you  have  instigated  the  producer  to  invest  his 
capital  in  the  undertaking.  i 

There  are,  or  have  been,  some  occupations,  the  result  of  evil  laws 
or  customs,  the  outcome  of  bygone  wrongs,  which  have  been  pro- 
hibited ;  and,  in  particular,  the  premature  employment  of  children 
and  of  women  in  some  severe  and  degrading  callings.  These  were  the 
outcome  of  the  past  restraints  on  labour.  It  is  very  rarely  that  I  find 
in  the  earlier  accounts  which  I  have  inspected  entries  of  children's  or 
women's  labour  in  the  fields.  When  the  detestable  assessments  oi 
the  justices  were  legal  they  became  common.  When  machinery 
began  to  supersede  liuman  labour,  and  adult  strength  was  no  longer 


THE  FACTORY  ACTS  AND  LOBD  SHAFTESBUBY.      355 

so  necessary,  they  became  cooimoner.  At  last  the  practice  became 
intolerable,  and  it  was  attacked  by  the  earlier  factory  legislation. 
Since  that  time,  to  the  dissatisfaction  of  the  laissez  faire  people,  the 
legislation  has  been  extended,  and  there  is  strong  reason  to  believe 
that  greater  restraint  will  be  put  on  certain  very  continuous  employ- 
ments. When  I  served  on  Sir  John  Lubbock's  committee,  I  was 
surprised  to  find  that  the  greatest  amount  of  overwork  was  exacted 
in  the  wholesale  City  warehouses,  which  close  to  appearance  with  or 
shortly  after  dayhght,  but  sometimes  continue  with  closed  doors  to 
very  late  hours. 

The  argument  for  the  Factory  Acts  was  that  the  children  were  in 
the  power  of  their  parents,  and  eked  out  miserable  earnmgs  by  their 
premature  toil,  that  it  entirely  prevented  education,  and  that  ii> 
weakened  the  vital  powers  of  the  child.  It  was  further  alleged,  and 
truly,  that  this  labour  was  not  advantageous  in  the  end,  that  long 
hours,  apart  fi-om  other  considerations,  were  a  loss,  and  that 
employers  did  not  know  their  own  interest  when  they  exacted  them. 
The  workmen  passionately  demanded  the  Factory  Act,  possibly 
because  they  foresaw  that  their  own  wages  would  be  bettered  if  the 
labour  of  children  were  prohibited ;  and  in  my  opinion  justly  and 
rationally  demanded  them.  The  employers  resisted,  and  angrily  ^ 
too.  They  were  offended,  perhaps  reasonably,  at  being  told  that 
they  did  not  understand  their  true  interests  and  their  own  business. 
They  looked  on  the  onslaught  as  a  direct  attack  on  their  own 
calling,  and  with  justice,  for  the  employment  of  children  in  agricul- 
tural labour  was  not  similarly  restrained.  Now  the  agricultural  / 
gangs  of  the  eastern  counties  were  worse  than  any  labour  in  thej 
factories.  They  were  defended  by  Mr.  Clare  Read,  among  others,; 
on  the  old  plea  that  cheap  labour  was  required  in  order  to  enable' 
farmers  to  pay  rents.  They  were  exposed,  denounced,  and  finally 
extinguished  by  a  Norfolk  clergyman,  at  his  own  personal  risk,  but 
to  his  great  honour. 

I  once  asked  my  friend,  the  late  Lord  Shaftesbury,  why  he  did 
not  extend  the  sphere  of  his  A(  ts  to  the  agricultural  children,  as 
well  as  to  the  young  people  in  the  factories,  for  that  he  must  have 
known  that  the  work  of  a  child  in  the  fields,  ill-fed,  poorly  clothed, 
and  exposed  to  the  worst  weather  in  the  worst  time  of  the  year  was 
to  the  full  as  physically  injurious  as  premature  labour  in  the  heated 


856        LAISSEZ  FAIBE :  ITS  OBIGIN  AND  EISTOEY, 

atmosphere  of  a  factory.  He  told  me  that  he  well  knew  the  eyll, 
but  was  powerless  to  meet  it ;  that  if  in  the  struggle  he  had 
engaged,  he  had  at  once  enlisted  the  hostility  of  the  manufacturers, 
the  farmers,  and  the  landowners,  he  should  be  incapable  of  doing 
anything  at  all,  and  that  if  he  procured  the  liberation  of  one  class 
of  children,  time  would  ensure  the  emancipation  of  the  rest.  Lord 
Shaftesbury  was  a  courageous  and  persevering  man,  as  you  know, 
and  his  answer  showed  how  well  he  knew  what  are  the  difficulties  of 
practical  politics.  People  blame  compromises,  when  they  do  not 
know  how  rarely  it  is  possible  to  get  anything  else.  Nor  do  men 
ordinarily  see  that  all  guaranteed  interests  are  of  suspicious  justice, 
and  that  just  or  not,  they  inevitably  invite  attack. 

Again,  it  may  be  plausibly  argued,  that  the  bestowal  of  education 
on  a  child  by  a  parent  is  as  natural  a  duty,  in  the  light  of  civiliza- 
tion, as  that  of  food,  clothing,  and  shelter.  But  the  question  is 
not  solved  so  simply.  Most  parents  do  bestow  one  kind  of  educa- 
tion on  their  children,  that  by  which  such  children  hereafter  get 
their  living.  The  children  of  the  peasant  generally  follow  their 
father's  calling,  and  if  he  be  an  expert  farm-hand,  readily  and 
rapidly  learn  the  many  and  varied  accomplishments  which  every 
person  experienced  in  agriculture  knows  to  be  included  in  such  an 
expression.  The  children  of  mechanics  also  generally,  indeed 
obviously,  grow  up  to  the  same  pursuit,  unless  ability  and  oppor- 
tunity combine  to  raise  either  out  of  an  hereditary  calling.  In 
point  of  fact,  occupations  are  more  hereditary  than  people  imagine, 
and  I  suspect,  Mr.  Galton,  in  dealing  with  hereditary  genius,  has 
confounded  hereditary  occupation  with  it,  for  I  should  think  that 
the  son  of  a  judge,  or  the  son  of  a  bishop,  has  more  chance  of 
becoming  eminent  in  the  law  or  the  church  (and  Mr.  Galton  seems 
to  think  that  success  is  genius)  than  the  son  of  another  man  who 
had  neither  influence  or  patronage  in  either  profession.  So  again 
with  special  learning,  .the  acquisition  of  which  has  a  market  value, 
because  the  communication  of  it  to  others,  by  speech  or  writing,  has 
a  price.  I  need  hardly  tell  you  that  there  is  scarcely  a  single 
endowment  in  public  schools  or  in  either  of  the  universities,  given 
by  benefactors  in  England  up  to  the  end  of  the  last  century 
which  was  not  intended  for  the  poor,  the  beneficiaries  of  which 
were  to  be  carefully  selected  all  over  the  country,  and  transferred 


EDUCATION,  PBIMAEY,  857 

for  higher  education  to  Oxford  or  Cambridge.  The  grantees  of 
the  monastic  lands  were  put  under  the  condition  of  endowing 
schools  with  part  of  that  which  they  received,  in  order  that  the 
education  conferred  by  the  monasteries,  much  more  general  than 
modern  ignorance  imagines,  might  not  be  lost,  and  the  pious 
founder  is  generally  only  paying  a  debt,  which  he  seldom  pays 
fairly.  Now  all  these  endowments  are  appropriated  by  the  rich. 
The  reason  is  plain,  the  higher  education  came  to  have  a  mer- 
chantable value. 

The  case  is  wholly  different  with  primary  education,  or  the 
ordinary  education  of  the  poor.  In  the  main  this  is  elementary. 
Now  if  every  working  man,  without  exception,  were  taught  up  to 
the  standard  required,  say,  for  passing  the  Oxford  or  Cambridge 
"  little-go,"  it  would  not  make  any  difference  to  the  wages  which 
such  a  person  would  earn.  Add  what  you  please  to  the  capacity  of 
all  industrial  agents,  in  the  way  of  physical  and  intellectual  power, 
and  you  will  add  nothing  to  the  wage-earning  power,  as  long  as  no 
individual  is  differentiated  by  the  instruction.  It  is  possible  that 
the  educated  workman  will  do  his  work  better,  more  briefly,  more 
eflficiently.  This  will  be  obviously  to  the  advantage  of  the  em- 
ployer. It  is  only  when  he  employs  his  acquired  intelligence  in 
his  own  calling,  and  makes  it  by  combination  the  means  of  exacting 
better  terms  from  his  employers,  that  his  acquisitions  are  a  source 
of  profit  to  him.  Now  this  I  suspect  the  workman  knows  as  well 
as  I  do.  I  am  bound  to  have  a  theoretical  knowledge  of  the  fact, 
he  is  led  to  have  a  practical  knowledge  of  it.  The  gain  of  his  ) 
child's  education  is  not  personal,  it  is  national.  The  individual  is  ! 
not  better  off  by  virtue  of  a  universal  and  compulsory  education, 
except  very  indirectly ;  the  nation  is  all  the  better  off,  because  a  I 
well-taught  race  is  cceteris  paribvs,  stronger  in  the  competition  of 
nations,  where  laissezfaire  is  supreme,  than  an  ill-taught  one  is.  I 
say,  cceteris  paribus,  for  the  best  educated  race  may  be  crippled  by 
unwise  financial  legislation.  Bismarck's  protectionist  policy  is 
rapidly  neutralizing  all  the  efforts  of  North  German  education. 

Now  the  peasant  or  artisan  is  first  bidden  to  dispense  with  the 
the  earnings  of  his  child,  pitiful  and  paltry  to  us,  but  notable  to 
the  men  who  can  often  only  live  by  stint,  to  whom  spare  diet  is 
a  habit.    Next,  for  the  sake  of  the  state,  the  nation,  he  is  bidden, 


358        LAIS8EZ  FAIBE :   ITS  OBIGIN  AND  HISTOBY. 

out  of  the  clipped  earnings  of  the  family,  to  have  his  child  taught. 
Then  out  of  our  ridiculous  system,  of  which  I  believe  Mr.  Lowe, 
examination  mad,  was  the  author,  the  poor  child  is  crammed  in 
order  that  he  may  earn  grants  for  the  school  by  his  answers  to 
the  inspector.  I  can  conceive  no  more  rational  contempt  and  dis- 
gust than  that  which  peasant  and  artisan  must  feel  for  this  precious 
scheme.  I  know  no  system  which  is  better  adapted  to  defeat  its 
own  ends,  none  in  which  a  shallow  pedantry  is  more  ridiculous  and 
more  transparent.  The  education  of  the  poor  ought  to  be  free,  it 
ought  to  be  inspected,  as  it  is  in  the  United  States,  by  a  committee 
of  competent  persons,  who  attend  to  the  master's  tests  and,  if 
needful,  apply  their  own.  I  have  no  doubt  that  if  the  change  were 
mode,  the  teaching  would  be  more  solid,  the  learning  more  attrac- 
tive, and  the  selection  for  a  higher  grade  more  satisfactory  than  it 
is  under  our  preposterous  system  of  extortion,  cram,  examination, 
and  grant. 

There  is  another  case  or  two  which  I  must  briefly  refer  to,  in 
order  to  illustrate  what  I  have  said  as  to  the  limits  of  laissez  faire. 
The  doctrine  is  become  an  exceedingly  useful  one  to  the  strong, 
an  argument  for  the  oppression  of  the  weak.  Under  the  English 
land  system  certain  families — all  I  grant  if  they  could  do  so,  a  state 
of  things  manifestly  impossible  —  are  permitted  to  settle  land. 
They  are  protected  against  their  own  errors,  vices,  misfortunes, 
by  the  machinery  of  an  estate  for  life,  with  remainder  in  tail. 
Land  is  limited  in  quantity,  while  population,  i.e.j  of  the  customers 
for  land  grows.  The  landowner  is  further  assisted.  All  local  taxes 
are  paid  by  his  tenants,  and  his  own  charges  are  put  at  an  absurdly 

"^  low  amount.  If  his  land  is  not  let,  it  ceases  to  pay  local  taxes. 
Land  was  formerly,  till  recently,  liable  to  certain  charges,  which 
are  now  to  a  great  extent  put  on  the  general  revenue,  i.e.,  on  the 
income-tax  payers ;  for  Chancellors  of  the  Exchequer  are  threatened 
with  revolt  if  they  venture  on  taxing  the  succession  of  real  estate 
as  personal  estate  is  taxed.  Everything  is  done  which  the  law  can 
do  indirectly  to  save  the  great  estates,  and  not  infrequently  they 
are  further  secured  from  dispersion  by  private  Acts  of  Piirlia- 
ment.     La  other  words,  the  law  of  England  does  its  very  best  to 

I  make  the  landowners  a  ring,  as  it  is  technicahy  called  in  trade, 
to  curtail  the  trade  in  land,  and  to  give  the  man  who  is  to  sell 


LAND  AND  THE  TENANT.  359 

the  use  of  land  an  overwiielming  advantage  in  all  contracts  for 
its  use. 

It  is  inevitable  under  these  circumstances,  that  the  tenant  will 
either  be  outrageously  fleeced,  or  that  the  law  must  regulate  con- 
tracts for  the  use  of  land.  We  have  done  so,  imperfectly  enough,  in 
Ireland.  We  have  done  so  still  more  imperfectly,  only  tentatively, 
and  with  a  serious  failure  of  common  justice  in  England,  for  we 
permit  a  landowner  to  raise  a  rent  arbitrarily  against  a  sitting 
tenant,  and  so  allow  him  to  confiscate  his  tenant's  capital.  At  first 
sight,  a  contract  for  the  use  of  land  seems  to  be  an  excellent,  an 
unimpeachable  field  for  the  principle  of  laissez  /aire.  It  is  only  so 
in  appearance,  as  every  civilized  government  has  discovered,  and 
ours  must,  it  may  be  hoped,  before  it  is  too  late.  For  we  may  be 
perfectly  sure  that  as  time  goes  on,  for  every  advantage  which  the 
existing  law  gives  the  landowners,  an  equivalent  will  be  exacted  by 
the  tenant  from  the  law  of  the  future.  People  complain  querulously 
that  the  tendency  of  recent  legislation  is  socialistic,  and  most  of  all 
they  complain  whose  position  and  the  advantages  of  whose  position 
are  distinctly  anti- social.  The  tenant,  in  brief,  when  he  makes  a 
contract  for  the  use  of  land,  except  in  so  far  as  he  is  constrained 
to  carry  on  his  occupation  in  a  market  which  is  rigged,  is  momen- 
tarily a  free  agent.  But  immediately  on  his  completing  the  con- 
tract he  ceases  to  be  a  free  agent,  and  is  at  the  mercy  of  the  land- 
owner, to  whom  the  law  gives  an  exceptional  power  in  many  ways. 
The  abuse  of  this  power  is  sure,  sooner  or  later,  to  bring  retaliation. 
The  existence  of  the  power  is  in  itself  a  terror.  We  may  be  sure 
that  when  those  who  elect  legislators  learn  what  they  can  do,  they 
will  retaliate.  Laissez  /aire  when  it  can  be  most  excused,  or  most 
defended,  postulates  equality  of  conditions  in  order  that  it  may 
affirm  equality  of  contracting  power. 

The  English  law  has  condemned  truck,  i.e.f  the  right  of  an 
employer  to  pay  his  workmen  in  goods,  or  in  orders  on  particular 
shops.  At  first  sight  the  practice  seems  justifiable.  Money  is  only 
a  pledge  of  purchases  to  come,  of  goods  to  be  acquired,  consumed, 
or  turned  to  further  use  and  profit.  The  employer  may  be  able  by 
the  command  of  his  capital,  and  by  the  fact  of  his  custom,  to 
secure  the  greatest  advantages  to  the  workmen  in  quality,  in  cheap- 
ness, in  variety.     He  may  inculcate  upon  them  the  excellent  prac- 


360        LAISSEZ  FAIBE  :  ITS  OBIGIN  AND  HISTOBY. 

tice  of  not  running  into  debt,  by  insisting  that  his  tallies  shall 
square  with  their  consumption.  But,  on  the  other  hand,  the 
employer  may,  and  the  temptation  is  exceedi»(gly  strong  to  do  so, 
make  a  further  profit  out  of  the  retail  transaction.  He  may  argue 
that,  as  he  gives  the  shopkeeper  a  large  custom  and  a  safe  trade, 
he  has  a  right  to  some  of  the  advantages  which  the  shopkeeper 
calls  his  good-will,  and  may  find  that  his  investment  in  the  tally 
shop  is  as  good  as  that  which  he  makes  in  his  business.  And  as 
the  dealer  is  made  to  pay  for  his  business,  he  may  reimburse 
himself  by  selling  inferior  goods,  by  giving  short  weight  and 
measure,  and  by  making  use  of  his  professional  skill  for  the  pur- 
pose of  cheating  his  customers  with  impunity,  since  he  has  a  sole 
and  secure  market.  You  will  see  at  once  that  the  evils  of  the 
system  counterbalance  the  advantages.  I  heard  the  other  day  of 
most  ingenious  scheme  of  truck,  which  perhaps  does  not  come 
under  the  Truck  Acts.  A  large  employer  of  labour  pays  his  work- 
men every  fortnight  in  tickets.  These  tickets  are,  to  all  intents 
and  purposes,  equivalent  to  checks  drawn  on  his  bankers,  the  pay- 
ment of  which  is  deferred.  They  are  known  to  be  equivalent  to 
a  deposit  at  the  bank,  and  to  be  therefore  well  covered.  The 
employer  makes  no  conditions  as  to  the  place  in  which  they  are 
negotiated,  except  finally  at  the  bank.  The  tradesman  takes  them 
for  goods  and  gives  change,  or  exchanges  them  for  money,  probably 
at  par,  as  he  can  make  up  the  loss,  if  any,  out  of  the  custom  which 
he  gets.  At  the  end  of  the  third  week  the  employer  sends  a  clerk 
round  and  exchanges  them  for  cash.  In  this  way,  for  I  am  told  his 
s^e  reason  is  that  which  I  am  about  to  state,  he  gets  into  his  hands 
the  capital  of  his  workmen's  labour  for  three  weeks  in  advance. 

For  a  long  time  the  legislature  permitted  private  individuals,  or 
partners,  the  number  being  limited,  in  consideration  of  the  privileges 
accorded  to  the  Bank  of  England  to  trade  in  money,  to  take 
deposits,  and  to  issue  notes  payable  on  demand  or  deferred,  without 
giving  any  security  by  an  independent  audit  as  to  their  solvency. 
It  gives,  for  reasons  now  historical,  very  many  of  these  powers  now. 
I  referred  to  these  reasons  when  in  one  of  my  lectures  I  treated  of 
paper  currencies.  Now  such  a  trust  ought  to  be  reposed  in  no 
person  whatever,  for  it  has  been  justly  said  :  "  Free  trade  in  bank- 
ing is  free  trade  in  swindling.''    Look  at  the  latest  ex];osition  of 


BE8TBAINTS  ON  BANKEB8,  861 

the  system.  Messrs.  Greenway,  a  quarter  of  a  century  ago,  as  one 
of  the  partners  said  under  examination,  had  with  a  note  issue, 
Hmited  to  £30,000,  a  capital  of  a  httle  over  £600.  They  had  as 
much  moral  right  to  carry  on  a  bank  under  such  circumstances  as 
a  street  sweeper  has.  But  they  put  a  face  on  it.  They  lived  hand- 
somely on  the  property  of  their  customers,  took  an  important  political 
position  with  the  property  of  their  customers,  traded  and  speculated 
with  the  property  of  their  customers,  and  failed  for  a  quarter  of 
a  milHon  or  more  a  few  weeks  ago.  They  published  balance-sheets, 
they  simulated  solvency  as  well  as  virtue  and  patriotism,  maintained 
the  sacred  rights  of  property,  and  abode  by  the  cause  of  law  and 
order.  But  their  debts  were  returned  as  assets  in  their  balance- 
sheets,  the  notes  which  they  put  into  circulation  on  faith  in  their 
virtue  were  in  innocent  hands,  and  the  indignant  and  defrauded 
gentlemanlike  party  in  the  district  had  the  poor  consolation  of 
hearing  their  bankers'  confessions,  and  burning  the  confessors  forth- 
with in  effigy.  It  is  not  an  invasion  of  laissez  faircy  you  will 
probably  conclude,  to  insist  on  an  independent  audit  of  the  assets 
of  private  banks.  Had  it  been  taken  twenty-five  years  ago,  the  trio 
might  have  remained  poor,  but  have  also  remained  honest. 

There  are  some  other  invasions  of  the  principle  of  laissez  /aire 
which  are  admittedly,  some  which  are  probably,  some  which  are 
doubtfully,  defensible  ;  some  which  are  entirely  and  absolutely  in- 
defensible. I  have  a  little  to  say  on  the  former,  I  must  reserve  the 
latter  to  a  later  lecture.  You  will  always  remember  that  every  in- 
vasion of  economical  liberty  is  on  its  trial,  that  those  who  maintain 
the  right  of  free  action  are  merely  on  their  defence,  and  that  just 
cause  has  to  be  shown  by  those  who  allege  that  private  right  should 
be  suspended  or  curtailed.  And  here  I  may  observe  that  private 
right  postulates  that  the  individual  is  not  by  his  conduct  undeserv- 
ing of  ordinary  rights.  I  will  illustrate  what  I  mean  by  an  action 
of  my  own.  When  the  Criminal  Law  Amendment  Act  was  in  com- 
mittee I  got  inserted  among  other,  I  venture  to  think  necessary, 
ame^^dments,  a  clause  by  which  a  criminal  parent  should  be  dis- 
abled from  exercising  parental  rights,  though  he  still  remained 
liable  to  parental  responsibilities.  I  had,  in  my  experience  of  the 
action  of  certain  criminals,  reason  for  an  amendment,  which  the 
House  of  Commons  accepted. 


R52       LAIS8EZ  FAIBE  :   ITS  OBIGIN  AND  HISTOBY. 

Now  you  will  probably  agree  with  me  that  laws  punishing  the 
aduliieratioa  of  goods  are  just.  I  have  already  explained  to  you 
what  are  the  economical  relations  of  trader  and  purchaser,  and  if  I 
am  right,  you  will  admit  that  the  customer  has  a  right  to  expect 
truth  from  the  dealer.  If  I  buy  bread  I  mean  to  get  bread,  not 
stones,  perhaps  not  potatoes  mashed.  If  I  buy  meat  I  want  meat, 
not  carrion.  And,  to  quote  a  recent  and  much-debated  topic,  if  I 
buy  butter  I  do  not  mean  to  buy  butterine.  So  with  a  thousand 
articles.  There  are,  I  know,  people  in  high  position  who  have 
defended  these  tricks  )f  trade,  on  the  somewhat  feeble  ground  that 
purchasers  prefer  adulterated  articles.  I  very  much  doubt  the  truth 
of  this  statement.  That  people  will  be  smart  in  shoddy  who  cannot 
afford  to  be  smart  in  cloth,  I  know  to  be  a  fact.  That  a  dandy 
whose  means  are  small  will  adorn  his  breast  with  Abyssinian  gold 
when  he  cannot  buy  sterling  is  a  fact,  and  may  be  a  lesson,  by 
disappointing  a  pickpocket.  But  I  doubt  whether  any  one  is  willing 
to  pay  the  price  of  a  genuine  article  for  what  he  knows  to  be  a 
sham.  And  this  is  what  adulteration  means  to  make  him  do. 
Besides,  ha  nugce  in  seria  ducunt.  Army  contractors  have  been 
known  to  ruin  a  campaign  by  frauds.  I  have  heard  it  said  that 
the  collapse  of  the  French  armies  in  1870  was  due  as  much  to  the 
frauds  of  the  contractors  as  it  was  to  the  superior  discipline  of 
Germany.  We,  too,  had  our  experiences  in  the  Crimea  and  Egypt. 
It  is  only  recently  that  we  have  heard  of  flexible  bayonets  and 
brittle  swords.  It  may  be  wise  to  turn  a  bayonet  into  a  reaping- 
hook,  but  it  is  not  satisfactory  to  find  it  turning  itself  into  one. 
Depend  on  it  the  principle  of  laissez  /aire  will  not  justify  adultera- 
tion, and  should  not  be  cited  to  condone  trade  frauds. 

Should  the  State  be  at  the  expense  of  the  higher  education,  and 
particularly  of  that  which  is  called  technical  ?  There  is  a  con- 
siderable amount  of  fallacies  uttered  about  the  latter  term.  I  hold 
that  a  well-regulated  apprenticeship,  such  as  in  practice  I  under- 
stand engineers  in  England  have  to  go  through,  is  a  good,  almost 
a  perfect,  technical  education.  Such  is  the  system  prevailing,  for 
I  have  witnessed  the  process,  in  the  American  technological  colleges, 
where  the  teacher,  sometimes  only  a  skilled  workman,  watches  the 
pupils'  efforts,  and  gradually  imparts  to  him  the  requisite  knack. 
Such,  as  I  have  told  you,  was  the  mediaeval  apiDrenticeship  in  the 


ADULTERATION.     TECHNICAL  EDUCATION.  863 

art  of  architecture  and  agriculture.  Now  if  everybody  is  to  be 
taught  this  in  his  degree,  the  State  may,  for  reasons  given  above, 
be  called  on  to  pay  it.  If  a  few  are  to  have  the  benefit,  the  State 
may  perhaps  start  the  institution,  as  they  did  at  Boston,  perhaps 
pay  part  of  the  management,  but  the  pupils  ought  to  supply  the 
means  for  its  continuity.  So  with  grants  to  universities.  I  never 
could  see  what  claims  the  Scotch  universities  had  on  a  Parlia- 
mentary grant.  From  the  Tay  to  the  border,  Scotland  is  as  rich 
as  any  part  of  the  United  Kingdom.  The  English  universities, 
from  the  oldest  to  the  most  recent,  have  been  founded  by  private 
munificence,  and  are  largely  supported  by  the  taxation  of  their 
members.  I  am  pretty  sure  the  Scottish  will  not  be  as  long  as 
Parliament  gives  them  money.  Myself,  by  a  moiety  a  Scotchman, 
I  am  assured  that  we  are  the  better  for  their  appearance  here,  where 
they  no  longer  say,  tenui  meditamur  avena.  But  it  might  be  argued 
that  Scottish  wealth  should  of  its  abundance  give  to  Scottish 
learning  in  Scottish  universities. 

More  disputable  still  is  the  obligation,  in  the  reputed  interest  of 
the  laws  of  health  and  of  public  safety,  to  compel  vaccination  and 
to  insist  on  the  notification  of  infectious  disease.  I  know  that  I 
am  treading  here  on  dangerous  ground,  on  the  fire,  as  Horace  says, 
which  lies  below  deceitful  cinders.  Medical  and  sanitary  science 
say  Yes  ;  but  there  is  a  strenuous,  perhaps  an  uneducated,  oppo- 
sition, which  says  No.  I  have  been  in  my  past  experiences,  when 
I  was  losing  my  health  in  the  public  service,  to  regain  it  by 
losing  my  seat  in  my  own,  put  to  great  straits  in  debating  and 
acting  on  this  question.  Much  opposition  is  irrational,  but,  strange 
to  say,  I  have  found  that  you  do  not  always  abate  it  by  calling  it 
irrational,  or  even  by  proving  to  your  own  satisfaction  that  it  is 
perfectly  fatuous.  On  the  other  hand,  much  science  is  bigoted  and 
intolerant,  and  I  have  found  that  eminent  men  of  science  have  much 
of  the  temper  of  an  inquisitor  when  you  are  slow  to  accept  their 
conclusions.  Besides,  they  are  occasionally  contradictory,  and  are 
not  free,  even  in  the  pure  ether  of  their  minds,  from  the  passion 
of  advocacy.  I  have  been  in  my  time  amused,  and  finally  shocked, 
at  the  conflict  of  scientific  witnesses,  even  in  matters  which 
appeared  to  be  demonstrable.  And  when  the  doctors  disagree, 
and  even  quarrel,  laissez  /aire  is  pretty  certain  to  re-assert  itself. 


864        LAISSEZ  FAIRE  :  ITS  OBIGIN  AND  HISTORY. 

There  are  subjects  on  which  it  is  constantly  alleged  that  the 
principle  of  laissez  /aire  should  be  suspended  or  rejected,  which 
are,  in  my  opinion,  no  way  to  be  dealt  with  on  such  lines.  But  I 
shall  be  dealing  with  the  history  of  the  Protectionist  movement  in 
my  next  lecture. 


xvn. 

THE  HISTORY  OF  THE  PROTECTIONIST    MOVEMENT  IN 

ENGLAND. 

The  revival  of  the  Protectionist  cry — The  aim  of  Protection  a  higher 
price — The  means,  heavy  import  duties — The  object  of  the  pro- 
ducer an  increasingly  wide  m^arket — Protection  gives  him  a  narrower 
one — The  effect  of  Protection  on  prices  and  labour — Protection  and 
rent — The  early  protective  laws — The  Pensionary  Parliament — 
The  policy  of  retaliation — The  futility  of  retaliation — Protection 
in  Europe  and  militarism — Protection  in  the  United  States,  and 
in  the  British  colonies — Mr.  Mill's  defence  of  Protection  ex- 
amined. 

It  is  difficult  to  approach  the  subject  on  which  I  purpose  to  lecture 
this  morning  without  a  definition,  and  yet  the  definition  of  Pro- 
tection, owing  to  the  vague  language  of  those  who  advocate  this 
unquestionable  interference  with  laissez  f  aire  (in  what  appears  to  be, 
under  all  or  any  circumstances,  the  most  violent  invasion  of  human 
liberty  conceivable,  short  of  slavery),  renders  it  very  difficult  to 
realize,  and  thereafter  to  grapple  with,  what  its  advocates  intend. 
Again,  the  very  shifting  ground  taken  by  those  who  advocate  a 
reversal  of  the  policy  which  this  country  adopted  above  forty  years 
ago,  the  singular  abstention  from  the  body  of  those  who  are  claim- 
ing a  change  of  any  persons  who  are  acquainted  with  the  principles 
of  business,  the  entire  absence  of  any  one  from  their  ranks,  who 
can  be,  by  the  wildest  stretch  of  imagination,  supposed  competent 
to  form  a  judgment  on  the  subject,  is  extremely  puzzling.  The 
leader  of  this  new  movement  is  a  gentleman  who,  before  he  sat 
in  Parliament,  was  a  superior  officer  in  the  criminal  detective  de- 


866     THE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

I)artment.  Mr.  Howard  Vincent  is  probably  a  very  capable  judge 
of  details,  and  I  daresay  was  an  accomplished  person  in  his  own 
line.  I  am  told  that  he  has  exercised,  from  his  own  past  experience, 
a  power  by  which  he  knows  every  person  in  his  constituency — a 
rather  questionable  honour  for  them.  All  I  know  about  him  is, 
that  before  he  came  in  Parliament,  he  got  the  Home  Office  to  pro- 
pound a  Bill  which  would  have  made  every  pawnbroker  a  prima 
facie  criminal ;  a  Bill  which  I  effectually  extinguished ;  and  when 
he  got  into  Parliament,  he  took  on  himself  to  move  a  grant  for  a 
very  deserving  object.  You  are  perhaps  aware  that  it  is  contrary 
to  Parliamentary  rule  for  any  one  but  a  Minister  to  ask  Parliament 
for  a  grant. 

As,  however,  Mr.  Howard  Vincent  has  been  among  us,  and  has 
got  his  associates  to  vote  for  a  return  to  Protection,  and  has  re- 
solved to  revive  a  controversy  which  we  all  thought  dead  and  buried, 
he  therefore  should  be  met.  I  purpose  in  the  next  two  lectures — 
on  this  and  next  Monday's — to  deal  with  the  history  of  Protection 
'up  to  1846,  when  it  received,  as  it  deserved,  its  coup  de  grace  here, 
on  its  continuance,  perhaps  its  extension  in  foreign  countries  and 
some  of  our  colonies ;  and,  in  the  next  place,  to  show  you  how  you 
must  interpret  the  tables  of  exports  and  imports,  in  other  words, 
the  foreign  trade  of  England,  so  as  to  give  reality  to  the  figures 
which  appear  in  the  small  annual  Blue-book  known  as  the  Statis- 
tical Abstract.  The  widespread,  but  at  the  same  time  extraordinary, 
delusion  which  possesses  many  nations  on  the  subject  of  Protec- 
tion, is  almost  as  much  an  ethical  as  it  is  an  economical  portent. 
In  the  United  States  it  is  a  widespread  opinion,  especially  in  New 
England  and  Pennsylvania,  and  I  am  informed  that  a  New  England 
or  Pennsylvanian  free-trader  is  almost  a  caput  lupinum,  a  man  whom 
Mr.  Howard  Vincent,  in  his  old  capacity,  would  have  had  to  take 
care  of,  or,  in  technical  language,  to  want.  But  in  the  earlier  and 
more  pious  days  of  New  England  there  was  a  similar  horror  of 
Quakers  and  witches,  and  the  sceptic  as  to  the  supernatural  wicked- 
ness of  these  two  imaginary  malefactors  ran  the  risk  of  a  probable 
tarring  and  feathering,  and  a  possible  hanging. 

Now  in  our  search  after  a  definition  we  must  always  remember 
that  Protection  is  a  password.  When  the  expression  is  complete 
it  means  Protection  to  native  industry.     Industry  means  work,  and 


THE  BEVIVAL  OF  THE  PB0TECTI0NI8T  CBY.        367 

native  industry  must  be  that  of  the  British  workman  and  the  capi- 
talist, in  so  far  as  he  is  a  workman.  But  in  early  times,  and  for 
the  matter  of  that  in  later,  as  far  as  England  was  concerned,  it 
always  meant,  not  a  workman,  who  was  not  in  the  least  thought 
of,  but  a  merfhfl.T^f-,  nnr^a  landowner — one  of  whom  was  conceived  " 
to  be  the  indirect  means  of  manning  the  British  navy,  and  must 
therefore  be  indulged  with  a  sole  market,  and  a  monopoly  of  freight ; 
the  other,  the  recipient  of  rent,  who  is  not,  in  that  capacity  at  least, 
industrious,  but  is  merely  living,  without  reproach,  in  my  opinion, 
as  long  as  his  receipts  of  rent  are  fair,  on  the  industry  of  others,  or 
as  he  has  been  profanely  described  by  an  eminent  and  versatile 
statesman,  of  the  class  "  which  toil  not,  neither  do  tljiey 
spin." 

Now  it  is  easy  to  discover  what  Protection  does  to  real  industry, 
i.e.,  to  the  labour  of  the  workman  with  educated  hands,  and  to 
the  labour  of  the  capitalist  superintendent  with  educated  head, 
respectively,  either  by  an  economical  analysis,  or  by  a  historical 
retrospect.     We   shall   be   able    to   show  what,  from    the  condi- 
tions of  industry  and  the  interchange  of  industrial  products,  must 
be  the  effect  produced  on  the  two  forms  of  industry  by  restraint 
in  that  particular  direction  which  Protection  implies,  and  we  shall 
be  able  to  show,  from  the  indisputable  evidence  of  facts,  what  it 
always  has  been.     There  are  parts  of  the  economic  theory  in  which 
the  relation  of  the  parts  is  so  obvious,  so  intimate,  and  so  inevitable, 
that  they  may  be  proved  apart  from  facts,  just  as  there  are  rela- 
tions of  numbers  and  plane  figures  which  can  be  proved  to  exist 
without  the  concrete  objects  which  illustrate  those  numbers,  and 
the  actual  surfaces  whose  relations  are  capable  of  a  practical  test. 
But  for  all  that,  the  abstract  is  always  the  better  for  the  concrete, 
the  principle  for  the  fact  which  demonstrates  the  principle,  the 
major  premiss  for  the  minor,  the  universal  for  the  particular,  the 
inductions  of  reason,  for  the  inductions  of  experience.     What  I 
propose  to  show  is,  that,  taking  society  at  large,  a  policy  of  Pro- 
tection could  not  benefit  industry,  and  has  not  ever  benefited 
industry,  meaning  by  industry  those  on  whom  society  depends  for 
its  existence  and  the  continuity  of  its  existence.     I  do  not  say 
that  some  individuals  may  not  be  temporarily  benefited  by  Proteo- 
tion,     A  thief  is  temporarily  benefited  by  stealing  a  watch,  but 


868     THE  FBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

we  do  not  on  that  account  give  a  legal  status  to  the  pickpocket, 
except  in  the  dock.  A  swindler  is  temporarily  benefited  by  success- 
fully forging  a  check.  But  we  do  not  on  that  account  condone 
forgery.  Unless  Mr.  Howard  Vincent  has  entirely  abandoned  all 
sympathy  with  his  ancient  calling,  he  must  admit  that  we  must 
consider  the  general  good  of  society,  and  not  individual  ad- 
vantage. 

And  now  to  deal  with  the  analysis  of  these  relations.  No  one 
will  deny  that  what  Protection  aims  at  is  to  secure,  by  the  opera- 
tion of  law,  a  higher  price  for  certain  articles  which  are  produced, 
or  presumably  could  be  produced,  in  the  country  which  is  invited 
to  adopt  such  a  fiscal  change  as  would  heighten  the  price.  The 
object  of  Protection  is  to  make  articles  dearer,  more  inaccessible, 
or  at  any  rate,  to  demand  from  the  purchaser  a  greater  sacrifice 
than  he  would  have  to  make,  if  no  protective  taxes  were  imposed. 
If  any  one  gains,  it  is  clear  that  the  purchaser  of  the  article  must 
suffer.  In  the  next  place,  to  make  the  protection  of  any  use  at 
all  for  the  objects  which  it  is  intended  to  serve,  it  must  be  imposed 
on  articles  of  general  consumption,  that  is,  on  those  which  the 
poor  must  consume,  and  cannot  evade  by  going  to  the  place  of 
their  origin  and  getting  them  there.  For  example,  the  American 
people  put  a  tax  on  the  price  of  foreign  wool  and  foreign  cloth, 
for  the  sake  of  compensating  the  farmers,  who  could  not  export 
a  pound  of  American  wool,  as  no  rational  spinner  would  buy  it, 
and  for  protecting  the  industry  of  the  native  spinners  and  weavers. 
The  late  message  of  the  President  of  the  United  States  to  Congress, 
says  that  no  objection  can  be  made  to  taxing  luxuries.  To  this  I 
might  answer.  What  is  a  luxury  ?  and  I  think  it  would  puzzle  a 
dozen  Presidents  to  give  an  answer.  But  the  fact  is,  the  system 
does  not  tax  high-class  goods  or  rich  consumers.  I  have  crossed 
the  Atlantic  four  times,  and  coming  and  going,  I  have  always  met 
people  of  American  descent,  highly  patriotic  citizens,  who  declare 
that  their  country  is  superior  to  the  rest  of  creation,  and  that  their 
institutions  are  as  free  and  enlightened  as  themselves  are,  who 
reckon  that  they  will  pay  the  price  of  their  passage-ticket  by  the 
difference  at  which  they  will  buy  stores  at  Poole's  in  Savile  Row, 
as  compared  with  the  price  they  will  give  in  Broadway.  I  do  not 
mention  this  to  advertise  Mr.  Poole,  who  is,  I  am  told,  an  excellent, 


THE  AIMS  OF  PBOTECTION  A  HIGHEB  PBIGE.       869 

but  rather  expensive  tailor,  but  to  sbow  that  they  who  admire 
Protection,  and  defend  it,  are  always  eager  to  escape  from  it  when 
it  comes  home  to  their  own  pockets ;  that  what  they  take  to  their 
bosoms  and  their  hearts  in  the  case  of  the  labourer,  the  tradesman, 
and  the  farmer  in  the  States,  they  reject  and  evade,  when  it;  touches 
a  far  less  vital  part  of  their  own  surroundings.  Protection  to  be 
of  avail  must  be  got  out  of  the  belly  and  back  of  the  great  mass 
of  consumers.  There  is  no  use  in  trying  to  protect  the  industry 
of  those  who  produce  articles  of  voluntary  use.  You  must  impose 
it  for  the  advantage  of  those  who  produce  articles  of  necessary  use. 
The  reason  lies  in  the  two  words.  Consumers  will  stint  or  forego 
articles  of  voluntary  use,  but  they  cannot  those  of  necessary  use. 
I  know  and  foresee  that  there  is  a  similar  difficulty  about  "  articles 
of  voluntary  use,"  that  there  is  about  "  luxuries."  It  is  hard  to 
define  either.  It  is  less  hard  to  define  "  voluntary  use  "  than  it 
is  luxury.  But  you  will  see  how,  even  though  undefined,  these 
words  make  for  what  I  am  engaged  on,  the  effect  of  production 
on  industry. 

Again,  there  is  no  use  in  putting  on  small  protective  duties. 
Every  country  has  a  natural  protective  duty  in  the  cost  of  freight. 
In  some  cases  it  is  so  heavy  as  to  be  prohibitive.  For  example, 
no  one  would  dream  of  importing  bricks  or  draining  tiles  from 
America  or  India.  Even  in  an  article  like  wheat,  the  cost  of 
freight  from  Chicago  to  London,  freights  being  ruinously  low,  is 
9s.  a  quarter.  Now  wheat  land  is  ill  cultivated  in  England  which 
does  not  produce  thirty-two  bushels  or  four  quarters  to  an  acre.  But 
3Gs.  is  a  very  large  natural  protection  to  the  British  farmer  for  an 
acre's  produce.  I  could  multiply  instances  and  tire  you  with  them. 
"Whether  I  should  convince  a  fair-trader  is  another  matter,  if  the 
instances  were  infinite  and  all  cogent.  If  we  keep  in  mind,  then, 
that  protective  taxes,  in  order  to  be  effectual,  must  be  of  articles 
necessarily  used,  and  that  they  must  be  pretty  large  in  order  to 
have  the  desired  and  reputed  effect  of  aiding  native  industry,  we 
shall  not  find  it  difficult  to  conclude  that  the  tax  must  be  put 
on  what  men,  women,  and  children  must  all  use,  especially  the 
poor,  and  that  the  tax  must  be,  in  commercial  language,  stiff. 
A  small  tax,  too  small  to  assist  native  industry,  would  be  of  no 
use,  except  to  the  Chancellor  of  the  Exchequer,  and  to  those  who 

25 


870    THE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

profit  by  taxes,  and  I  presume  that  Mr.  Howard  Vincent  does  not 
want  to  merely  increase  taxes.  In  my  opinion  the  distribution 
of  the  taxes  already  levied,  might  well  be  put  under  the  view  of 
a  financial  director  of  criminal  investigation,  with  considerable 
advantage  to  public  morality  and  to  the  taxpayer's  pocket. 

Again  the  advocate  of  a  policy  which  is  the  reverse  of  that  which 
has  been  adopted  in  this  country  for  the  last  forty  years  assures 
us,  in  solemn  and  prophetic  language,  that  his  expedient  will 
heighten  profits  and  wages.  He  dilates  on  the  land  which  has 
gone  out  of  cultivation,  on  the  numbers  of  the  unemployed,  on  the 
stint  of  profits,  on  the  decline  of  wages.  But  an  inquiry  has 
latterly  shown  that  the  land  which  has  gone  out  of  some  sort 
of  tillage  or  the  other,  is  less  than  '00006  of  the  area  of  England 
and  Wales,  a  very  low  fraction.  Mr.  Goschen,  who  is  not  a  friend 
of  Mr.  Howard  Vincent  (he  would  belie  his  own  income-tax  returns 
if  he  did  not  admit  it),  shows  that  profits,  especially  in  incomes 
between  ^1000  and  £le50  a  year  are  increasing.  The  savings- 
bank  returns  are  also  increasing,  the  average  of  each  depositor 
being  rather  lessened.  And  I  should  like  to  know  a  little  about 
the  statistics  of  the  unemployed.  They  are  not  yet  forthcoming, 
except  in  so  far  as  I  obtained  a  Parliamentary  return  of  the  Oxford 
and  Cambridge  professors.  I  do  not  much  care  for  vague  state- 
ments, especially  when  there  is  a  suspicion  about  the  motives 
of  the  vagueness.  For  many  years,  in  the  infancy  of  my  researches 
into  English  agriculture,  I  used  to  examine  the  reports  of  each 
year's  harvest  in  the  Mark  Lane  Gazette.  I  dare  say  that  I  noted 
them  for  near  twenty  years.  The  report  invariably  stated  that 
the  harvest  was  below  an  average.  Now  as  such  a  statement, 
annually  repeated,  constitutes  an  arithmetical  impossibility,  I 
ceased  to  study  the  Mark  Lane  Gazette.  Do  not  imagine  that  I 
learned  nothing  from  the  statement.  The  Mark  Lane  Express  was 
a  farmer's  paper,  and  I  saw  that  the  farmers  were  playing  at  hide- 
and-seek  with  the  landlords,  and  that  the  newspaper  was  assisting 
them  in  the  game.  You  will  frequently  find,  as  you  live,  and  get 
shrewd  in  interpreting  the  second  or  secret  meaning  of  what  people 
say,  that  even  fictions  may  be  instructive. 

Everybody  produces  in  the  expectation  of  a  market.  Sometimes 
he  produces  more  than  the  market  will  take  off  his  hands,  by  mis- 


PBODUCEES  DE8IBE  A  WIDE  MABKET,  371 

calculation  or  even  by  necessity.  He  may  find  that  he  cannot  sell  all 
he  makes,  and  yet,  for  reasons  familiar  to  men  of  business,  must  go 
on  making,  storing  goods,  employing  labour.  He  does  so  in  hopes 
that  the  market  will  sooner  or  later  lift  his  stock,  and  in  the  inter- 
val he  tries  to  induce  economies  on  production,  to  lessen  cost,  and 
if  he  can,  to  lower  the  charge  of  freight.  He  seeks  above  all  things 
to  sell,  sometimes  by  improving  the  produce,  sometimes  by  elimina- 
ting middle  men,  sometimes  by  lessening  some  of  his  profit.  There 
is  nothing  which  he  dreads  more  than  the  risk  of  selling  less,  fot 
he  has,  we  must  suppose,  extensive  buildings  to  keep  in  repair,  ex- 
pensive machinery  to  keep  going,  skilled  hands  to  keep  together. 
The  estimate  that  he  makes  of  his  business  is  based  on  the  width  of 
the  market,  and  his  hopes  that  it  may  get  wider.  My  late  friend, 
Mr.  Babbage,  long  ago  pointed  out  to  me  that  the  division  of  employ- 
ments, which  all  economists  are  agreed  is  the  most  potent  agency 
in  the  diminution  of  cost  in  production,  is  principally  aided  by  the 
width  of  the  market.  As  he  is  longing  for  a  wider  market,  and 
chafing  most  naturally  at  the  artificial  restraints  which  foreign 
countries,  encouraged  by  metaphysical  economists,  have  put  on  his 
market,  Mr.  Howard  Vincent  comes  to  him,  and  offers  him  a  still 
narrower  market,  as  a  priceless  boon ;  for,  to  every  man  out  of 
Bedlam,  a  higher  price  means  a  narrower  market.  There  must 
be  something  seductive  in  a  proposal  which  at  first  sight  offers 
him  a  certain  loss,  in  place  of  a  possible  gain. 

But  the  fair-trader  is  not  an  absolute  fool.  He  recognizes  the 
difficulty  which  I  have  referred  to  above,  the  tendency  of  goods  in 
these  days  of  competition,  of  cutting  prices,  of  imperilled,  perhaps 
of  lessened,  profits,  to  accumulate.  He  sees  how  serious  a  hindrance 
hostile  tariffs  are  to  the  British  producer,  and  he  dwells  on  the 
inconvenience  and  wrong.  He  probably  does  not  know  that  the 
folly  of  British  governments  has  made  these  hostile  tariffs  possible, 
folly  committed  years  after  the  free-trade  policy  was  affirmed.  Now 
he  says,  "Levy  a  customs  duty  on  foreign  imports,  and  you  will  raise 
prices,  increase  your  profits,  and  give  employment."  It  is  just  pos- 
sible that  the  possessor  of  these  accumulated  goods  might,  if  such  a 
policy  were  adopted,  sell  what  he  cannot  sell  now,  though  this  is 
far  from  certain.  But  what  becomes  of  the  continuity  of  industry 
■then  and  afterwards  ? 


372    THE  PBOTECTIOmST  MOVEMENT  IN  ENGLAND. 

I  have  told  you  that  it  is  no  use  protecting  by  taxes  what  people 
may  decline  to  use.  The  serviceable  or,  to  be  more  accurate,  effec- 
tual protection  is  of  what  they  must  use — food,  clothing,  cheap 
luxuries.  And  the  new  school  is  candid.  They  want  to  tax  food, 
alleging  the  decline  of  British  agriculture,  which  mainly  means  the 
diminution  of  rents,  though,  as  I  shall  show  you  presently,  raising 
corn  to  60s  a  quarter  would  not  necessarily  raise  rents.  They 
want  to  make  a  raid  on  the  cupboard  and  the  wardrobe  of  the 
poor.  But  to  sell  agricultural  and  manufacturing  produce  at  arti- 
ficially high  rates  is  not  to  give  employment.  It  is  not  to  secure 
profit,  for  price  does  not  guarantee  one  or  the  other.  In  the  seven- 
teenth century  wheat  was  at  an  average  41s.  a  quarter,  rent  4s.  6d. 
an  acre,  wages  of  agricultural  labour  at  first  4s.,  and  after  the 
Commonwealth  was  established  6s.  a  week ;  artisans  6s.  and  8s. 
After  protective  duties  were  levied  on  corn  with  a  view  of  improv- 
ing rents,  with  the  pretence  of  stimulating  agriculture,  the  police 
of  labour,  the  justices  in  Quarter  Sessions,  strove  to  bring  back  the 
two  kinds  of  labour  to  the  old  prices.  They  never  told  the  work- 
men, who  had  no  votes  then,  that  Protection  would  increase  wages, 
nor  the  tenant  farmer,  who  was  also  politically  voiceless,  that  high 
prices  would  keep  up  farmers'  profits.  They  were  too  contemptuous 
of  these  interests  to  be  sophistical. 

Let  us  now  suppose  that  the  new  fiscal  policy  is  accepted,  that 
taxes  are  put  on  imported  food  in  order  to  assist  agricultural 
industry ;  taxes  on  cotton,  woollen,  and  linen  goods,  in  order  to 
assist  textile  industry ;  and  similar  imposts  for  similar  ends  im- 
posed on  other  products  reputed  to  be  manufactures,  on  products 
of  industry,  and  not  raw  materials,  though,  of  course,  without 
giving  a  definition  of  this  puzzling  expression,  and  which  is  really 
an  intermediate  product — wool  and  flax,  are  as  much  a  product  of 
industry  as  cloth  and  linen  are,  and  cloth  and  linen  are  raw  mate- 
rials to  the  tailor  and  shirt-maker.  At  once  the  stint  begins.  The 
labouring  man  gets  a  single  loaf  where  he  got  a  loaf  and  a  half ;  a 
single  boot  where  he  got  a  pair  of  boots ;  a  coat  once  in  two  years 
when  he  used  to  get  it  every  year.  He  has  of  course,  for  the  bread 
must  be  got,  even  less  power  to  buy  a  pair  of  boots,  especially  at 
the  enhanced  price,  and  the  coat  than  ever.  Now  the  leather  dealer 
during  the  artificial  inflation,  has  perhaps  sold  his  stock  of  leather, 


EFFECT  OF  PROTECTION  ON  PBICES  AND  LABOUB,    873 

the  shoemaker  his  stock  of  boots,  thfe  cloth  weaver  his  stock  of  cloth. 
All  want  to  be  busy,  but  the  market  is  gone,  or  so  shrunken,  that 
there  remains  only  half  the  old  occupation  for  the  employer  and  the 
labourer.  The  army  of  the  unemployed  is  doubled  at  a  stroke,  and 
it  is  fortunate  if  the  teacher  of  this  new  gospel,  in  which  a  possible 
temporary  gain  is  followed  by  a  certain  permanent  loss,  is  not  in- 
vited again  to  assume  his  ancient  functions  as  a  director  of  criminal 
investigation.  For  it  is  certain  that  if  prices  were  trebled,  and 
three  men  were  taking  the  wages  of  one  man,  the  employer  will 
give  no  more  wages  than  he  need,  be  he  farmer,  manufacturer,  shoe- 
maker, tailor,  builder,  or  indeed  any  one  of  the  multitudinous 
traders  or  employers  who  figure  in  the  census.  A  workman  does 
not  get  wages  because  a  trader  informs  him  chat  he  will  get  them, 
but  because  his  labour  is  needed,  since  there  are  people  ready  to 
buy  or  use  what  his  labour  produces.  Employment  is  not  of  spon- 
taneous growth,  but  is  the  result  of  definite  and  intelligible  impulses. 
Take  away  or  curtail  the  impulses,  and  you  do  not  stimulate  employ- 
ment. You  might  as  well  say,  if  you  closed  up  your  window 
shutters  in  broad  daylight,  you  would  have  light  in  your  dwellings, 
by  some  spontaneous  action,  independent  of  yourself.  You  would 
have  to  put  up  with  a  candle  or  a  lamp,  to  pay  for  it,  and  therefore 
have  less  to  buy  other  things  with.  But  worse  would  come.  You 
would  in  human  industry  have  destroyed  its  continuity,  have 
brought  into  irretrievable  confusion  the  complicated,  but,  on  the 
whole,  beneficent  agencies  of  modem  society,  and  have  effectually 
beggared  the  labourer  and  the  capitalist  employer. 

There  is  one  occasion,  and  one  only,  on  which  high  prices  will 
induce  higher  wages.  This  is  when' there  is  an  urgent  demand  for 
something  of  which  the  supply  i^  short.  This  generally  happens 
after  there  has  been  some  great  destruction  of  the  products  of  wealth 
or  some  prolonged  suspension  of  ordinary  industrial  action.  Such  is 
ordinarily  the  result  of  a  great  war,  in  which  much  property  is  anni* 
hilated,  workmen  have  been  employed  in  mutual  slaughter  or  in  pro- 
viding the  means  of  mutual  slaughter,  but — the  condition  is  all  impor- 
tant— the  recuperative  power  of  the  nation  or  state  is  not  seriously 
impaired.  Such  a  state  of  things  ensued,  for  example,  after  the 
civil  war  in  America,  and  after  the  Franco-German  struggle.  It  did 
not  ensue  after  the  Thirty  Years'  War,  after  the  war  of  the  Spanish 


374    THE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND, 

succession,  after  the  great  Continental  War,  for  the  principal  com- 
batants were  absolutely  exhausted  after  the  struggle.  Bat  when 
such  high  prices  prevail,  protection  is  entirely  superfluous.  Native 
industry  has  its  own  way,  and  does  not  need  to  be  guided  or  fos- 
tered. To  offer  protection  at  such  a  time  as  this,  would  be  like 
offering  a  strong  and  healthy  man  a  pair  of  crutches.  The  offer  or 
suggestion  of  protection  comes  when  trade  is  dull,  stocks  are  accu- 
mulated, profits  are  imperilled,  and  quacks  talk.  The  acceptance 
of  it  would  make  trade  more  dull,  stocks  more  unsaleable,  and 
profits  go  out  of  the  category  of  peril  into  the  actuality  of  extinction. 
It  would  be  a  small  consolation  for  quacks  to  be  silenced. 

I  have  told  you  that  exalted  prices  of  agricultural  products,  due 
to  artificial  causes,  would  not  raise  rents.  They  would  enable 
sitting  farmers  to  get  rid  of  their  stocks,  and  even  enable  them  to 
pay  existing  rents.  But  they  would  not  recover  rents.  For  rent 
is  the  resultant  of  two  forces,  of  which  one  has  been  dwelt  on 
disastrously  as  the  sole  cause  of  rent ;  the  other,  to  which  the 
greater  part  of  rent  is  due,  has  been  studiously  ignored.  The 
former  is,  the  naturaLpowers  of  the  soil,  judiciously  used  and 
renovated.  This  source  of  rent  was  known  to  Pharaoh  and 
Nebuchadnezzar.  It  is  commented  on  very  properly  by  Herodotus, 
when  he  describes  Egypt  and  Mesopotamia.  The  latter  is  agri- 
cultural skill,  which  is  the  capacity  of  the  tenant.  This  may  be 
shortened,  even  destroyed.  You  can  no  more  extemporise  capitalist 
farmers  by  artificial  prices  than  you  can,  as  the  polite  but  dilatory 
Frenchman  thought  an  astronomer  could,  encore  an  eclipse.  A 
destroyed  interest  is  more  difficult  to  revive  than  it  is  to  create  one. 
The  agricultural  landowners  of  the  eighteenth  century  created 
British  agriculture.  The  horseracing  landowners  of  the  nine- 
teenth century  have  destroyed  it.  And  of  all  the  mean  things 
which  mischief-makers  can  do,  none  is  more  mean  than  to  claim 
that  the  rest  of  mankind  should  meekly  set  to  work  to  pay  them 
for  the  mischief  which  they  have  done.  It  is  possible  that  the 
injury  which  has  been  done  to  British  agriculture  is  not  so  serious 
after  all,  as  people  who  are  smarting  with  the  consequences  of 
their  own  foUy  would  have  us  believe.  But  of  the  fall  of  British 
rents  there  is  no  doubt.  Of  the  recovery  of  them  there  is  the 
gravest  doubt,  for  the  source  of  them  is  seriously  impaired.     But  if 


PROTECTION  AND  BENT.  375 

the  capitalist  employer  has,  in  great  degree,  disappeared  from 
agriculture,  what  is  the  prospect  of  agricultural  wages  rising  under 
artificially  enhanced  rents  ?  Will  the  farmer  give  Hodge,  from 
spontaneous  good  nature,  a  shilling  a  week  more  for  his  work,  when 
he  can  get  Hodges  in  plenty,  because  the  price  of  corn  Is  doubled  ? 
Why,  at  the  end  of  the  eighteenth  century,  when  farmers  were 
getting  150s.  a  quarter  for  wheat,  agricultural  wages  were  at  7s.  a 
week  (you  may  read  of  them  in  Sir  Frederic  Eden's  "  History  of 
the  Poor  ")  and  farmers  were  grumbling  because  they  had  to  pay 
so  much. 

The  old  free-traders  of  forty  or  fifty  years  ago  used  to  say  that 
all  Protection  meant  robbing  somebody  else.  The  expression  was 
plain  spoken,  homespun,  perhaps  coarse,  but  it  was  very  accurate. 
The  object  of  protection  is  to  enhance  prices.  Prices  are  what  a 
man  has  to  pay,  for  it  is  no  use  to  enhance  a  price  which  no  one 
will  give.  But  to  make  me  or  any  one  else  pay  more  for  what  I 
must  have  than  I  need  pay,  and  to  put  this  compulsion  on  me  in 
the  interest  of  the  third  party,  which  is  most  falsely  called  native 
industry,  is  as  violent  an  invasion  of  my  personal  liberty  as  I  can 
easily  conceive.  I  do  not  object  that  prices  are  heightened  against 
me,  in  order  to  provide  funds  for  the  administration  of  public 
affairs,  for  internal  and  external  defence,  for  the  proper  dignity  of 
the  collectivity,  which  we  call  the  United  Kingdom  or  the  empire, 
though  every  one  has  the  right,  a  right  too  rarely  exercised,  of 
criticizing  taxation  and  expenditure.  But  I  object  very  strongly 
to  being  called  on  to  pay  for  one  man's  profits  and  another  man's 
rent,  especially  when  I  have  grave  doubts  whether  profits  or  rent 
will  be  improved  by  these  means,  and  I  am  quite  sure  they  ought 
not  to  be,  if  they  could.  It  is  bad  enough  to  be  plundered  for  the 
best  of  causes,  but  to  be  plundered  for  the  worst  is  more  than 
irritating.  I  might  wince  if  my  own  savings,  or  my  own  harmless 
enjoyments  were  curtailed  in  order  to  increase  the  wages  of  em- 
ployed or  unemployed  workmen,  though  I  might  bear  the  calamity 
with  equanimity,  but  to  have  them  curtailed  when  I  am  quit© 
certain  that  the  process  will  only  make  the  condition  of  labourers 
worse  is  a  good  deal  more  than  a  grievance. 

But  it  is  time,  especially  as  part  of  this  subject  is  postponed 
till  the  following  lecture,  that  I  should  say  something  about  the 


376    TEE  PROTECTIONIST  MOVEMENT  IN  ENGLAND. 

history  of  that  fiscal  policy  which  was  exploded  some  forty  years 
ago.  And  here  I  may  observe,  that  the  assault  which  Adam  Smith 
made  on  the  Protectionist  policy  of  his  time  was  chiefly  directed 
against  the  mercantile  theories  of  his  time,  and  not  very  notably 
against  the  landowners.  "The  mean  and  malignant  sophisms 
which  he  denounces  were  put  out  by  the  trading  interest,  who  were 
then  the  advocates  of  the  sole-market  theory,  •'  the  sneaking  arts 
of  an  underling  tradesman,"  has  only  to  be  quoted  to  show  its  aim. 
He  was  under  the  impression  that  the  landowner  was,  on  the 
whole,  high-minded  and  patriotic,  a  little  too  fond  perhaps  of 
artificially  cheapening  labour,  and  possessed  of  an  income,  the 
origin  of  which  would  not  be  well  defended,  after  an  economical 
analysis,  but  one,  who,  on  the  whole,  used  his  position  honestly 
and  fairly.  He  was  very  much  in  the  right.  The  great  land- 
owners were  still  engaged  in  the  highly  serviceable  work  of  teach- 
ing agriculture.  Their  rents  were  by  no  means  extortionate. 
Arthur  Young,  who  has  no  words  too  strong  for  the  absentee  and 
grasping  Irish  landowner,  blames  the  excessive  leniency  of  the 
English ;  for  though  he  held  that  a  tenant  farmer  ought  to  have 
adequate  security,  he  also  held,  and  with  considerable  reason,  that 
a  fair  rent  was  a  stimulus  to  progressive  agriculture. 

A  search  into  the  early  statutes  would  lead  the  student  to  the 
discovery  of  many  laws  which  were  intended  to  assist  new  de- 
partures in  English  industry.  Our  early  kings  and  early  parlia- 
ments were  really  anxious  to  assist  in  the  development  of  new 
energies,  and  in  the  improvement  of  old  ones.  They  encouraged 
Flemings  to  settle  in  England,  though  curiously  enough  the  craft 
of  the  weaver  (textor)  was  long  a  synonym  for  the  depraved 
appetite  of  a  heretic,  of  one  who  hungered  after  novelties  of  faith, 
or  as  the  weavers  themselves  said,  after  the  earlier  gospel.  The 
Plantagenet  kings,  early  and  late,  faced  this  risk,  if  haply  they 
might  improve  English  textile  industry.  But  owing,  as  I  believe, 
to  the  unparalleled  backwardness  of  the  English  intelligence,  the 
expectation  was  baffled.  Of  course  the  prohibition  of  foreign 
goods  was  more  intended  to  discourage  than  to  prevent  their 
importation.  The  administration  must  have  been  aware  that  it 
could  not  stop  smuggling.  Hints  occur  over  and  over  again  in 
accounts,  that  the  officers  of  customs  were  by  no  means  uncorrupt. 


THE  EABLY  PBOTECTIVE  LAWS.  877 

and  that  a  judicious  present  was  not  without  its  effect.  Infinitely 
more  effectual  than  the  preventive  service  of  the  ports  were  the 
sumptuary  laws.  People  who  broke  these  laws  went  about  with 
the  evidence  of  their  offence  on  them.  But  the  clothing  which  a 
noble  alone  was  allowed  to  wear  was  not  an  English  product,  and 
therefore  did  not  call  for  protection. 

Protective  laws  in  England  have  been  of  two  kinds — those  which 
controlled  the  importation  of  foreign  food  in  the  interest  of  the 
landowners,  and  those  which  taxed  or  prohibited  the  introduction 
of  foreign  manufactures,  in  the  interest  of  dealers  or  merchants, 
and  to  some  extent  of  manufacturers.  The  early  policy  of  the 
EngUsh  Parliament  was  to  favour  imports  of  food  and  to  check 
exports.  The  Government  had  a  reasonable  anxiety  that  foreign 
countries  should  be  encouraged  to  make  up  the  occasional  defi- 
ciencies of  English  harvests,  and  wished  to  preclude  loss  in  bad 
years  by  checking  exportation.  Thus  in  1438,  the  only  serious 
scarcity  of  the  fifteenth  century,  the  administration  actually  forbad 
the  inland  water  carriage  of  com,  on  the  ground  that  occasion  would 
be  taken  if  it  were  once  on  shipboard  to  export  it.  In  dear  times, 
corn  ships,  putting  under  stress  of  weather  into  English  harbours, 
were  bound  to  dispose  of  the  whole  or  part  of  their  cargo  in  Enghsh 
markets.  The  laws  against  forestaUing  and  regrating,  i.e.j  buying 
corn  on  the  way  to  market,  and  selling  corn  in  the  market  at 
which  it  was  bought  for  a  higher  price,  were  really  due  to  a  desire 
on  the  part  of  the  Government,  to  secure,  as  far  as  possible,  plenty 
for  the  consumer. 

The  first  really  important  legislative  Act,  the  object  of  which  was 
to  raise  rents  at  the  expense  of  the  consumer,  and  in  the  interest 
of  the  rent-receiver  was  that  of  the  Pensionary  Parliament  of 
Charles  IL  I  have  referred  to  it  before,  and  pointed  out  that  it 
was  a  failure,  for  shortly  after  the  passing  of  the  Act  occur  a  series, 
on  the  whole,  of  very  cheap  years,  and  as  we  leam  from  the 
literature  of  the  age,  there  followed  loud  laments  about  agricultural 
distress,  this  being,  historically,  the  landlords'  name  for  cheap  food. 
After  the  Revolution  the  legislature  granted  a  bounty  on  the 
exportation  of  corn,  an  expedient  which  was  intended  to  heighten 
prices.  As  the  new  agriculture  was  developed,  it  had  an  opposite 
effect.     It  stimulated  production,  for  it  was  a  premium  on  which 


378    TEE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

the  producer  could  speculate,  and  for  wliicli  he  would  sow  a  larger 
breadth.  Exactly  the  same  complaint  is  now  being  made  in  those 
countries  which  give  a  bounty  on  beet-root  sugar.  The  producers 
are  urged  into  producing  more  than  the  market  needs,  by  the 
chance  of  getting  this  premium  on  production.  I  doubt  whether 
the  English  refiners,  who  are  constantly  clamouring  about  the 
bounty,  have  suffered  so  much  as  the  continental  farmers  have, 
who  are  supposed  to  be  benefited  by  it.  The  favcturs  of  Govern- 
ment are  like  the  box  of  Pandora,  with  this  important  difference, 
that  they  rarely  leave  hope  at  the  bottom.  During  the  greater  part 
of  the  eighteenth  century  the  Corn  Laws  were  inoperative,  the 
bounty,  as  far  as  the  consumer  was  concerned,  was  innoxious.  I 
shall  revert  to  the  later  history  of  these  Corn  Laws  hereafter. 

The  growing  importance  of  the  American  colonies,  to  the  fiscal 
'theory  of  which  I  referred  in  a  lecture  of  last  term,  and  the 
development  of  the  sole-market  project,  led  to  the  whole  system  of 
manufacturing  protection.  But  it  is  plain,  from  Adam  Smith's 
language,  that  the  most  odious  part  of  this  system  was  not  the 
manufactures  which  it  forced  on  the  colonists,  but  the  restraint  of 
trade  which  the  traders  insisted  on  and  extended,  under  successive 
amendments  of  the  Colonial  Trade  Acts.  One  thing  proves  this 
incontestably.  The  American  colonists  smarted  exceedingly  under 
the  losses,  I  may  say  the  atrocities,  of  the  War  of  Independence. 
But  they  were  better  customers  of  England  after  the  war  was  over 
than  they  were  before.  To  be  sure,  the  English  were  becoming 
the  weavers  of  the  world.  Their  trade  grew  and  their  fortunes 
with  the  growth.  Now  such  people  do  not  want  protection.  They 
do  not  care  for  it,  They  would  prefer  free  trade,  because  they  get 
a  profit  on  both  exports  and  imports.  They  were  jealous  of  one 
place  only.  They  feared  the  rivalry  of  one  country  only.  This 
was  Ireland,  and  they  destroyed  her  manufactures  piecemeal.  Is 
it  not  written  in  the  English  and  even  in  the  Irish  Statute  Book  up 
to  1782  ?  With  this  exception,  tlbe  English  manufacturers  are,  on 
the  whole,  free-traders  during  these  early  years.  At  last  they 
became  all  but  unanimous,  enthusiastic  on  the  subject. 

The  case  was  very  different  with  the  landowners.  Land,  thanks 
to  the  experimental  cultivation  of  the  eighteenth  century,  was 
exceedingly  well  tilled  at  the  end  of  that  century.     The  evidence 


THE  POLICY  OF  BETALIATION,  379 

on  this  subject  is  conclusive  and  abundant,  as  one  can  see  by 
studying  the  country  reports  sent  to  Arthur  Young,  as  Secretary  of 
the  Agricultural  Board.  But  the  landowner,  as  a  rule,  ceased  to  be 
a  cultivator.  Bents  rose  rapidly,  partly  owing  to  the  generally 
diffused  skill  of  the  farmers,  partly  to  the  extremely  high  prices  of 
corn,  partly  to  the  forced  paper  currency.  Population  increased  in 
numbers  and  in  misery.  The  determination  to  keep  up  rents,  by 
keeping  up  a  high  price  of  corn,  became  a  passion  as  keen  as  that 
which  is  said  is  the  appetite  of  a  tiger  who  has  tasted  human  flesh. 
I  Uved  in  my  youth  through  the  time  of  this  fury.  On  one  side 
of  my  household  I  consorted  with  the  free-traders.  On  the  other, 
I  consorted  with  protectionists,  and  heard  the  maledictions  of  both 
parties.  It  was  a  battle  of  giants.  They  who  were  in  the  fray 
were  of  very  different  stature  and  thews  from  the  fair-traders.  It 
is  superfluous  to  pursue  the  subject  further  on  this  occasion.  In 
my  next  lecture  I  shall  hope  to  deal  with  what  has  happened  to 
English  manufacture  and  trade  since  1846.  But  there  are  matters 
connected  with  the  practice  of  other  nations,  referred  to  with 
admiration  by  some  writers  and  speakers,  with  the  analysis  of 
which  I  may  fittingly  occupy  the  rest  of  the  time  which  I  may 
claim  of  you. 

The  pleas  on  which  a  reversal,  more  or  less  complete,  of  our 
present  policy  has  been  advocated,  as  far  as  England  is  concerned, 
are  chiefly  based  on  the  expediency  of  retaliation.  Foreign 
countries  have  excluded  the  goods  of  our  production  from  their 
markets.  Our  own  colonies  have  done  so  with  even  greater  strin- 
gency. There  is  just  so  much  reason  in  this,  because  these 
colonists  are  generally  producers  of  nothing  as  far  as  we  are 
concerned,  except  undeniably  raw  material,  such,  say  as  wool  and 
wheat,  and  other  countries  are  producers  of  manufactures  which 
they  want  to  sell ;  and  therefore,  to  adopt  a  policy  entirely  exclu- 
sive, would  destroy  their  own  export  trade,  or  at  least  force  it  into 
roundabout  and  less  profitable  channels.  Now  these  people  argue, 
and  they  are  supported  by  a  most  erroneous  and  mischievous 
utterance  of  Mr.  J.  S.  Mill,  that  retaliatory  tariffs  are  real 
remedies  against  prohibitive  or  protectionist  tariffs.  "  Let  us 
then,"  they  say,  "  give  these  people  a  taste  of  their  own  doctrine. 
Let  us  handicap  them  in  our  own  country  and  in  those  countries 


380    TEE  PEOTECTIONIST  MOVEMENT  IN  ENGLAND. 

in  which  the  administration  is  still  the  master,  for  instance,  in 
India  and  the  Crown  colonies.*' 

But  there  is  a  difficulty  at  the  very  beginning.  The  worst 
offenders  against  us  are  our  own  kinsfolk,  whom  we  have  defended 
in  their  infancy  at  our  cost,  and  who  retort  on  us  by  repudiating 
all  the  products  of  our  industry  but  our  money.  It  is  certain  that 
any  attempt  to  retaliate  upon  them  would  be  resented,  and  that  the 
result  of  the  attempt  would  be,  that  the  Imperial  Institute  and  all 
that  it  symbolizes  would  be  shattered.  I^  Great  Britain  wants  to 
keep  such  a  hold  as  it  has  on  Greater  Britain,  it  must  submit  to 
Greater  Britain's  financial  petulance.  Hence  the  project  of  retali- 
ation excludes  the  British  colonies  from  the  scheme,  or  revives  the 
old  differential  theory  of  the  Colonial  Empire,  without  securing  any 
compensatory  restrictions.  We  are  to  buy  of  our  colonies  only,  or, 
on  advantageous  terms  to  them ;  are  to  consent  to  other  nations 
buying  of  them  as  freely  as  we  do,  and  those  other  nations  permit; 
and  are  to  bear,  on  the  hypothesis  of  retahation,  greater  injuries 
from  them,  Tvith  patience,  serenity,  and  persistent  consideration  for 
tije  greatness  of  the  empire,  whatever  affronts  they  put  on  our 
ti'dde.  Talk  about  one-sided  free  trade.  That  may  be  a  calamity. 
I  do  not  dispute,  but  I  do  not  exaggerate  the  inconvenience.  But 
one-sided  retaliation  is  a  most  pitiful  absurdity. 

But  Mr.  Mill  is  wholly  in  the  wrong.  Eetaliatory  duties  never 
did  and  never  will  avail.  They  are  essentially  personal.  They 
are  easily  met  by  trans-shipment.  Let  us,  for  instance,  meet — the 
figures  are  a  mere  hypothesis — a  bounty  of  10  per  cent,  on  French 
refined  sugar  by  a  "  countervailing  duty."  The  French  refiner 
will  forthwith  ship  his  sugar  to  Bergen  or  Christiania.  No  sugar 
is,  I  believe,  produced  from  beet-root  in  Sweden  or  Norway.  It  is 
thence  trans-shipped  to  Hull.  Now  no  country  has  ever  in  its  fiscal 
system  been  able  to  grapple  with  the  origin  of  goods.  It  would 
not  be  the  duty,  inclination,  or  interest  of  the  port  authorities  of  the 
Swedish  kingdom  to  assist  us  in  tracing  the  origin  of  goods,  and 
they  would  assuredly  resent  custom-house  detectives  prowHng 
about  the  waters  over  which  they  have  jurisdiction.  Besides, 
retaliation  has  the  inconvenience  of  admitting  that  the  offender  is 
in  the  right.  Again,  nations  have  never  been  known  to  revise  their 
tariff  laws  by  reason  of  force  majeure,  and  I  doubt  whether  the 


THE  FUTILITY  OF  BETALIATION.  881 

strongest  nation  could  coerce  the  weakest  in  this  way.  Again,  the 
smuggler  is  sure  to  reappear  in  the  interest  of  the  consumer,  and 
with  his  sympathy  and  covert  assistance.  But  most  powerful  of 
all  is  the  argument  that  a  community  which  adopts  a  protective 
system  deliberately  or  unconsciously  puts  itself  under  a  commercial 
disadvantage.  Every  country  wants  to  sell  something,  even  if  it 
determines  on  buying  nothing.  The  more  completely  it  carries  out 
the  latter  resolve,  the  worse  price  does  it  make  for  what  it  wants  to 
sell,  the  more  of  its  goods  must  it  offer  in  order  to  make  any 
market  at  all,  since,  for  example,  it  loads  itself  with  a  double 
freight  in  order  to  effect  a  single  transaction.  If  it  took  nothing 
but  money,  as  Eussia  is  striving  to  do,  it  would  in  addition,  sooner 
or  later,  depreciate  by  over-supply  the  only  article  which  it  will 
accept  in  exchange.  The  country,  on  the  other  hand,  which  takes 
its  produce,  gets  what  it  buys  on  the  easiest  terms,  or  as  Mr. 
Mill  says,  by  a  happy  inspiration,  in  marked  contrast  to  much 
which  he  has  written  on  the  subject  of  international  trade,  though 
here  he  does  not  specify  the  cause,  it  gets  articles  more  cheaply 
than  they  are  procurable  in  the  country  of  their  origin.  But  to 
retaliate  would  be  to  lose  this  advantage.  We  do  not,  it  is  true, 
sell  as  much  as  we  could  under  the  present  system.  But  we  buy 
much  cheaper.  Retaliate,  and  you  sell  no  more,  and  buy  on  far 
worse  terms.  And  as  much  of  what  is  sold  is  raw  material,  in  the 
strictest  sense  of  the  word,  which  Great  Britain  keeps  or  re-exports, 
to  heighten  the  price  of  what  you  buy  would  be  to  straiten  supply, 
to  check  manufacture,  and  to  diminish  the  demand  for  labour,  and 
with  it  wages.  Even  agriculture,  which  is  always  demanding  Pro- 
tection, and  has  lately  affirmed  it  with  naked  selfishness,  is  bhnd 
to  its  own  interests.  For  a  wise  agriculture  is  that  which  busies 
itself  with  its  own  best  products.  Let  us  conceive  this  to  be  stock- 
raising.  But  a  plentiful  supply  of  cheap  food  for  stock  more  than 
compensates  for  the  low  price  of  the  food  itself,  in  so  far  as  it  is 
produced  at  home. 

I  shall,  however,  I  hope,  in  my  next  lecture  dispose  of  most  of 
those  allegations  which  are  made  for  the  purpose  of  suggesting 
retaliatory  measures,  as  I  deal  with  details.  In  this  lecture  I  am 
concerned  with  principles.  I  cannot  see  what  right  any  producer 
has,  or  any  landowner  for  the  matter  of  that,  to  pretend  to  strike 


382     TEE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND, 

at  another  and  wound  me.  One  of  the  commonest  and,  I  may 
add,  one  of  the  most  impudent  of  fallacies  is  that  a  private  interest 
is  a  public  duty.  If  in  the  competition  of  foreign  agricultural  pro- 
duce, all  the  agricultural  rent  of  England  were  to  disappear,  what 
is  that  to  the  mass  of  Englishmen  ?  We  might  have  to  deplore  the 
loss  of  a  class  of  men  whose  existence  has  been  characterized  by 
lofty  probity,  by  patriotic  aims,  and  by  unselfish  devotion  to  the 
common  good,  by  the  unvarying  exhibition  of  pubhc  and  private 
virtue,  by  an  elevating  example  of  refined  culture,  of  ennobling 
pursuits,  of  passionate  devotion  to  a  lofty  ideal,  of  a  long  record  of 
just  and  painstakmg  service,  of  an  order  so  self-restrained  and 
faultless  that  no  scandal  has  attached,  early  or  late,  to  any  of  its 
members  during  its  historical  career.  But,  beyond  doubt,  abun- 
dance for  those  who  work  is  better  than  full  rents  to  those  who 
merely  afford  us  a  shining  example.  And  if,  as  I  have  said,  wheat 
land  is  protected  by  the  cost  of  freight,  to  the  extent  at  least  of 
3Gs.  an  acre,  there  is  something  wrong  in  English  agriculture 
which  no  duty  on  corn,  Mr.  Chaplin's  proposal,  will  remedy. 

Europe  is,  I  admit,  increasingly  protectionist.  It  is  also  in- 
creasingly military.  I  am  not  clear  that  the  waste  of  its 
resources  in  one  direction  should  make  us  admire  it,  still  less 
follow  its  example,  when  it  wastes  its  resources  in  another  direc- 
tion. It  is  an  open  secret  that  the  finances  of  nearly  every' 
European  Power  are  strained  to  the  uttermost,  and  that  the 
margin  between  solvent  and  bankrupt  exchequers  is  perilously 
narrow.  When  governments  are  in  straits  for  money,  they  may 
make  loans,  claim  a  part  of  their  subjects'  property  under  a 
direct  tax  on  their  means,  or  levy  new  customs  duties.  There  is 
a  limit  to  the  first  process,  though  where  the  hmit  is  is  hard 
to  say,  for  the  fact  of  its  being  reached  lies  in  the  vast  region 
of  the  unexpected,  and  the  limit  is  ruin  or  repudiation.  The 
second  is  always  unsafe,  and  generally  unprofitable.  It  is  especi- 
ally unsafe  now,  for  it  greatly  resembles  the  most  offensive,  and 
to  the  well  to  do,  unpopular  demands  of  communism.  Besides 
the  wealth  which  would  be  most  conveniently  attacked  can  seldom  be 
attached.  When  it  is  imperilled,  it  can  satisfy  the  Scythian's 
conditions  of  passing  imperceptibly  through  earth,  air,  and 
water,  and  so  escape  the  Scythian's  arrows.     The  most  resolute 


PBOTECTION  IN  EUROPE,  888 

and  Bismarcljian  of  financiers  would  think  once,  twice,  or  thrice 
before  he  came  to  quarters  with  owners  of  Stock  Exchange  secu- 
rities and  bankers'  balances  in  his  own  country.  There  must  be 
some  warning  of  the  intended  effort,  and  then  cantdbit  vacuus. 

There  is  always  in  reserve  a  new  tax  on  consumption.  This  was 
nearly  the  whole  of  English  finance  during  the  terrible  struggle  of 
the  Continental  War.  The  person  who  pays  is  helpless.  He  is 
offered  the  alternative  of  abstinence,  often  the  power  of  consuming 
at  a  cheaper  rate,  an  inferior  home  product.  The  payment  is 
almost  insensible.  The  custom-bouse  officer,  it  is  true,  cuts  a 
large  slice  from  the  loaf,  weakens  the  coffee,  lessens  the  supply  in 
the  sugar  basin,  makes  a  great  hole  in  the  habiliments,  and  so 
forth ;  but  he  is  invisible,  and  this  is  some  consolation.  And  then 
the  manufacturer  is  to  be  consoled  by  the  most  agreeable  combination 
which  can  be  offered  him,  patriotism  plus  profit.  Taxes  on  food 
are  to  be  levied  in  aid  of  the  farmer,  and  compensatory  duties  are 
accorded  to  everybody,  in  consideration  of  these  taxes  on  food. 
The  people  are  assured  that  they  are  independent  of  foreign  nations, 
and  under  all  there  is  increasing  misery,  decreasing  wages,  increas- 
ing discontent,  increasing  repression,  socialism  of  the  most  menacing 
kind,  and  an  utter  distrust  in  the  providential  fimctions  of  govern- 
ment. The  result  is  not  encouraging.  Everybody  is  to  be  benefited, 
and  everybody  is  dissatisfied,  impoverished,  and  discontented.  From 
the  Ural  mountains  to  Gibraltar,  Europe  is  seething  with  social 
volcanoes. 

The  history  of  Protection  in  the  States  of  the  American  Union  is 
entirely  different.  The  people,  though  high-spirited,  proud  of  their 
country  and  their  institutions,  and  resolutely  determined  to  permit 
no  meddling  with  the  northern  half  of  the  New  World,  are  not  dis- 
posed to  k«ep  on  foot  a  large  army  or  formidable  navy.  They  have 
no  mind  to  interfere  in  European  politics,  or  ape,  as  they  say,  the 
inevitable  folly  and  extravagance  of  monarchical  institutions,  but 
they  are  quite  resolved  that  no  one  of  these  powers  shall  interfere 
with  them.  They  have,  therefore,  no  urgent  necessity  for  excep- 
tional taxation,  no  excuse  for  an  impolitic  and  vexatious  fiscal 
system.  But  they  are  none  the  less  the  victims  of  sophistry, 
supported,  it  cannot  be  denied,  by  corruption  and  even  by  terrorism. 
The  American  people  pretend  to  be  the  freest  nation  in  the  world. 


884    THE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

and  they  permit  themselves  to  be  fleeced  and  plundered  by  a  few 
interests,  which  dictated  their  own  terms  at  a  supreme  crisis  of  the 
national  history,  and  found  spokesmen  and  agents  when  the  country 
was  aghast  at  the  political  perfidy  which  was  visible  everywhere. 
The  protectionist  tariff  of  Mr.  Morrill  was  in  great  part,  as  I  have 
heard  alleged  by  eminent  American  statesmen,  the  price  paid  for 
the  allegiance  of  the  manufacturing  East.  I  have  been  told  this  so 
unanimously  and  so  uniformly  that  I  cannot  doubt  it.  I  do  not 
conceive  that  these  persons  put,  as  the  phrase  goes,  into  black  and 
white  the  terms  of  the  treaty,  but  many  men  half  consciously  act 
on  what  they  would  be  ashamed  to  openly  avow. 

There  were,  of  course,  other  reasons  given.  The  American 
financiers  copied  the  precedent  of  the  War  of  Independence,  and 
raised  their  loans  by  a  floating  debt,  which  was  funded  as  a  paper 
currency.  This  is,  of  course,  a  most  extravagant  way  of  creating 
a  debt,  because  it  creates  an  over-issue  of  inconvertible  paper, 
depreciates  the  stock  in  which  the  debt  is  ultimately  founded,  and 
necessitates  in  the  end  the  concession  of  a  prodigious  premium 
to  the  virtual  lenders  of  the  fund,  the  public  which  circulates  the 
notes.  The  greenback  finally  was  quoted  at  over  250,  gold  being  at 
100.  No  more  wasteful  way  of  creating  a  debt  could,  I  think,  have 
been  devised  than  that  adopted  by  United  States  Treasury.  The 
evil  too  of  a  forced  paper  currency  long  survived  the  occasion  of 
its  issue,  and  numerous  and  shameful  advantages  were  taken  of  the 
situation  by  Wall  Street  gamblers,  to  the  infinite  misery 'of  the 
American  working  classes.  The  facfc  is  now  confirmed  by  the  record 
of  prices. 

Now  how  was  the  people  to  be  reconciled  to  a  tariff,  which,  in  the 
natnre  of  things,  and  in  accordance  with  the  inevitable  conditions 
of  indirect  taxation,  must  press  with  far  greater  severity  on  the 
pocr  than  on  the  rich  ?  The  people  was  instructed  that,  under  this 
policy,  the  country  would  be  self-contained,  and  independent  of 
foroign  supply  (though  America  has  borrowed  more  in  Europe 
than  any  other  country),  that  this  policy  was  certain  to  lead  to  the 
development  of  all  kinds  of  industry,  and  would  exhibit  the  varied 
and  versatile  character  of  American  genius,  while  without  it,  the 
people  would  be  limited  to  a  few  common  pursuits,  that  prosperous 
America,  the  paradise  of  labour,  would,  under  a  free  market,  be 


PBOTECTION  IN  TEE  UNITED  STATES,  885 

handicapped  by  cheap  foreign  labour,  by  the  famished  slaves  of 
European  despotism.  It  was  necessary  therefore  that  the  better-off 
workmen  should  be  protected  by  protecting  the  employers'  profits, 
as  though  employers  paid  wages  in  proportion  to  their  profits,  and 
not  in  proportion  to  the  bargains  which  they  could  force  upon 
workmen.  I  remember  telling  my  friend,  Mr.  Cyrus  Field,  when 
the  new  tariff  was  passed,  that  before  many  years  were  over, 
America  would  be  visited  with  an  anarchic  and  socialist  trades 
union,  and  the  experiences  at  Pittsburgh  and  Chicago,  the  knights 
of  labour,  and  the  followers  of  Mr.  George,  are  a  justification  of 
my  prediction.  The  system,  which  has  been  enforced,  over  and 
over  again,  by  American  economists  and  statesmen,  has  been 
maintained  by  terrorism,  for  honest  men  have  had  to  choose 
between  reticence  on  free  trade  and  the  threat  of  social  and  com- 
mercial excommunication ;  while  corruption,  not  only  that  known 
as  lobbying,  under  which  the  manipulation  of  members  of  congress 
has  been  made  a  fine  art,  but  lavish  and  equally  corrupting  expen- 
diture on  harbours  and  ports,  canals  and  the  like,  has  been  freely 
practised,  the  excessive  receipts  of  the  treasury  being  freely  em- 
ployed in  order  to  demoralize  localities.  At  last,  though  even  now 
the  President  has  not  felt  strong  or  bold  enough  to  utter  the 
word,  the  whole  question  of  Protection  and  Free  Trade  is  made 
an  issue  to  the  American  Republic. 

The  action  of  the  British  Colonial  Governments,  who  have  gene- 
rally adopted  a  Protectionist  trade  policy,  is  based  on  different 
grounds.  The  advocates  of  the  system  have  sometimes  stated, 
what  does  form  an  apology,  though  not  a  good  one,  for  high  custom 
duties,  that  in  a  thinly  peopled  country  it  is  difficult,  if  not  impos- 
sible, to  collect  direct  taxes,  especially  from  the  mass  of  the  people, 
or  to  levy  countervailing  excises,  and  that  therefore  the  only 
remaining  source  of  revenue  is  considerable  customs.  But  if  it  be 
hard  to  levy  an  excise,  because  the  power  of  collecting  it  is  scanty, 
and  the  law  might  be  evaded,  it  is  hard  to  see  how  smuggling  is 
to  be  checked.  Then  the  fallacy,  so  often  exposed  in  these  lectures 
that  high  prices  make  high  wages,  has  been  industriously  dissemi- 
nated and  insisted  on.  This  can  only  happen  when  prices  are 
naturally  raised  in  a  free  market,  when  the  situation  tends  to  in- 
crease the  demand  for  labour.    It  does  not  happen,  when  the  rise 

26 


386     THE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

is  artificially  induced,  because  the  demand  for  labour  is  not  in- 
creased, but  if  anything  diminished.  But  their  chief  reliance  is  on 
a  famous  passage  in  Mr.  Mill's  '*  Political  Economy." 

I  am  referring  to  a  statement  which  will  be  found  in  book  v. 
chap.  X.,  of  this  classical  work.  Mr.  Mill,  after  stating  it  to  be 
*'  the  only  case  in  which,  on  mere  principles  of  political  economy, 
protecting  duties  may  be  defensible,  is  when  they  are  imposed  tem- 
porarily (especially  in  a  young  and  rising  nation),  in  hopes  of 
naturalizing  a  foreign  industry,  in  itself  perfectly  suitable  to  the 
circumstances  of  the  country.  The  superiority  of  one  country  over 
another  in  a  branch  of  production  often  arises  only  from  having 
begun  it  sooner.  There  may  be  no  inherent  advantage  on  one 
part,  or  disadvantage  on  the  other,  but  only  a  present  superiority 
of  acquired  skill  and  experience.  But  it  cannot  be  expected,  that 
individuals  should,  at  their  own  risk,  or  rather  to  their  certain  loss, 
introduce  a  new  manufacture,  and  bear  the  burden  of  carrying  it 
on,  until  the  producers  have  been  educated  up  to  the  level  of  those 
with  whom  the  processes  are  traditionaL  A  protecting  duty  con- 
tinued for  a  reasonable  time  will  be  sometimes  the  least  incon- 
venient mode  in  which  the  nation  can  tax  itself  for  the  support  of 
such  an  experiment.  But  the  protection  should  be  confined  to 
cases  in  which  there  is  good  ground  of  assurance  that  the  industry 
which  it  fosters  will  after  a  time  be  able  to  dispense  with  it ;  nor 
should  the  domestic  producers  ever  be  allowed  to  expect  that  it  will 
be  continued  to  them  beyond  the  time  necessary  for  a  fair  trial  of 
what  they  are  capable  of  producing."  Perhaps  there  is  no  passage 
in  any  work  which  exhibits  so  much  ignorance  of  human  nature, 
and  so  much  ignorance  of  facts. 

I  don't  quite  know  what  Mr.  Mill  means  by  **mere"  political 
economy,  a  term  which  I  emphasize.  What  is  called  political 
economy  is  true  or  false.  If  it  is  "mere,"  it  is  of  no  validity  or 
force.  But  to  pass  this  by.  In  every  young  and  rising  nation  there 
are  a  number  of  capacities,  which  are  as  yet  undeveloped,  perhaps 
unknown.  The  best  way  to  make  them  known  and  develop  them 
is  to  let  them  come  to  the  front  spontaneously.  The  best  way  to 
leave  them  unknown,  and  to  develop  them  unhealthily,  is  to  allow 
Government,  at  the  instance  of  individual,  and  probably  mistaken 
self-interest,  to  give  them  assistance  out  of  people's  pockets.    Be- 


MB.  MILL'S  DEFENCE  OF  PROTECTION  EXAMINED'.    387 

Bides,  in  what  does  the  suitableness  consist  ?  Is  it  in  the  circum- 
stances of  the  country,  or  in  the  superiority,  as  the  passage  seems 
to  imply,  of  acquired  skill  and  experience,  which  is  the  capacity  of 
the  applicant  for  this  qualified  protection  ?  If  the  former,  the  cir- 
cumstances will  soon  assert  themselves ;  if  the  latter,  is  the  appli- 
cant to  be  the  judge  of  his  own  skiU  and  experience,  and  inform 
the  Government,  or  how  is  the  Government  to  put  him  to  the  test? 
Sum  it  as  one  will,  the  situation  is  one  in  which  the  conditions 
cannot  be  satisfied.  On  the  other  hand,  every  country  has  in 
nearly  every  industry  the  enormous  protective  duty  of  the  cost  of 
freight.  Nor  is  the  passage  in  which  the  writer  cannot  expect  that 
"  people  should  at  their  risk  or  rather  to  their  certain  loss  "  initiate 
a  calling,  to  the  purpose.  Mr.  Mill  has  evidently  in  his  mind  the 
East  India  Company.  That  as  a  trading  association  was  a  failure, 
as  Mr.  Mill  lived  to  see.  But  there  was  this  apology  for  the  pro- 
tection accorded  to  the  East  India  Company,  that  the  basis  of 
operations  was  ten  thousand  or  more  miles  oE  In  that  of  the  pro- 
tected young  country  the  disadvantage  of  distance  counts  against 
its  rivals.  And  why  should  the  nation  tax  itself  for  the  support  of 
the  experiment  ?  Why  undergo  a  certain  loss  in  order  to  force  a 
confessedly  unprofitable  industry  ? 

Who  is  to  give  the  assurance  that  the  industry  which  is  fostered 
will  be  able  after  a  time  to  dispense  with  the  protection  ?  Not  the 
applicant  certainly.  He  never  did  and  never  will  assure  the  country. 
On  the  contrary,  he  will  tell  those  who  have  been  rash  enough  to 
give  him  his  head,  *'  that  the  action  of  the  Government  has  given 
him,"  as  Lord  Liverpool  said,  ** '  a  vested  interest,'  that  the  shock  to 
the  industry  would  be  fatal,  that  workmen  would  be  discharged  and 
ruined,  capital  would  be  lost,  and  the  latter  end  would  be  worse 
than  the  begmning.  You  might  have  refused  us  a  trial,  if  you 
pleasftd.  It  is  base,  cruel,  dishonest,  to  induce  us  to  start  this  in- 
dustry and  then  desert  us.  We  may  have  erred  in  believing  that  a 
short  time  would  set  us  on  our  feet,  but  is  our  error  to  be  expiated 
by  our  ruin  ?  We  are  the  creation  of  the  State  in  its  wisdom,  do 
not  let  us  be  the  victims  of  its  caprice.  Mr.  Mill  saw  the  necessity 
for  creating  us,  he  could  not  have  foreseen  or  contemplated  the  ex- 
pediency of  destroying  us."  Had  I  lived  in  a  country  where  the 
State,  in  deference  to  Mr.  Mill,  had  protected  me,  I  think  I  should 


388     THE  PBOTECTIONIST  MOVEMENT  IN  ENGLAND. 

reason  in  this  way,  when  I  was  threatened  with  the  withdrawal 
of  the  protection. 

What  too  is  a  fair  trial  ?  Is  it  in  the  judgment  of  the  domestic 
producers,  or  of  the  Government,  or  of  a  court  of  law  ?  It  may  be 
pleaded  with  justice  that  the  circumstances  precluded  a  fair  trial. 
The  origin  of  the  industry  was  an  unnatural  stimulus,  and  you  have 
no  right  to  expect  a  healthy  life.  By  constituting  the  State  as  the 
judge  of  the  occasion  on  which  an  industry  may  be  protected,  you 
deprive  the  person  who  prosecutes  the  industry  of  learning  what  are 
the  only  natural  conditions  on  which  he  may  practice  his  industry 
with  success.  You  blind  him,  and  ultimately  insist  on  his  exer- 
cising the  function  of  sight.  The  fact  is  the  whole  passage  is 
metaphysics,  mere  political  economy,  very  bad  metaphysics,  and  no 
political  economy  at  aU. 


XVIII. 

THE  INTERPEETATION  OF  EXPORT  AND  IMPORT  TABLES. 

The  present  subject  dull  and  dificult^  but  important— Alarms  about 
exports  and  imports — Causes  of  the  decline  of  nations— ^Effects 
of  debts  on  exports  and  imports— Effects  of  the  cost  of  freight- 
Customs  and  bonded  warehouses — Walpole^s  scheme — Re-exports 
and  their  effects — The  United  States,  and  the  figures  of  its  trade 
with  the  United  Kingdom— The  trade  of  France — The  business 
of  warehousemen — Fallacies  derived  from  comparative  figures — 
Alarmist  fallacies — The  case  of  leather,  and  the  lecturer's  analysis 
of  the  trade. 

You  may  naturally  anticipate  that,  in  dealing  with  the  topic  which 
forms  the  subject  of  my  lecture  this  morning,  I  am  inviting  you  to 
consider  the  most  unattractive  and  dreary  of  social  facts.  Here, 
you  may  say,  are  the  relations  of  political  communities  condensed 
into  a  set  of  figures,  which  may  interest  merchants,  financiers, 
statesmen,  pohticians,  because  they  are  obliged  to  get  up  their 
subject,  or  at  least  pretend  to  have  got  it  up.  But  it  must  be 
possible  to  learn  tlie  economical  relations  in  which  divers  peoples 
stand  to  each  other,  the  principles  and  practice  of  exchange,  the 
mutual  interdependence  of  different  countries,  without  demanding 
that  one  should  analyze  the  national  ledger,  and  to  see  how 
exports  and  imports  are  balanced  against  each  other.  The 
information  is  for  the  expert,  not  for  the  student  of  economical 
forces.  There  is,  I  cannot  deny  it,  some  ground  for  these  objec- 
tions. But  there  are  far  stronger  reasons  why  I  ask  you,  if  not 
to  undertake  the  criticism  of  a  particular  set  of  figures,  such  as, 
for  instance,  the  Blue-book  which  is  before  me,  the  Statistical 


390  INTEBPBETATION  OF  EXPOET  AND  IMPORT  TABLES. 

Abstract  for  1885 ;  at  least  to  understand,  in  order  to  refute  or  be 
proof  against  the  popular  fallacies  which  are  frequently  uttered 
about  such  statements,  what,  in  this  concrete  form  of  the  volume 
of  foreign  trade  which  this  country  undertakes,  are  the  facts  and 
principles  which  must  be  before  you  in  order  to  understand  any 
Buch  publication.  For,  after  all,  in  these  figures,  and  in  the 
interpretation  of  them,  lies  the  very  essence  of  practical 
economics.  Here  is  the  picture  in  little  of  British  activity,  in  so 
far  as  it  is  concentrated  in  the  United  Kingdom,  and  has  within  a 
couple  of  generations  become  the  most  extensive  creditor  of  foreign 
communities  that  has  ever  been  known,  and  thereby  has  become 
the  centre  of  trade  transactions  with  the  world. 

I  once  asked  a  Parliamentary  friend  of  mine.  Lord  Eothschild, 
whether  certain  speculative  stocks  were  not  held  extensively  on  two 
of  the  most  active  of  the  foreign  bourses,  Paris  and  Berlin,  and  I 
instanced  Egyptians  and  Suez  Canal  shares.  He  told  me  that  in 
his  opinion,  by  far  the  largest  part  of  these  stocks  were  held  in  the 
United  Kingdom.  I  asked  him  how  he  came  to  the  conclusion, 
and  he  replied,  that  if  an  extensive  order  was  given  to  purchase 
in  either  of  these  securities  in  Berlin  or  Frankfort  or  Paris,  say 
£100,000,  no  broker  in  these  cities  would  undertake  the  com- 
mission at  a  price,  for  some  hours,  that  is,  till  he  had  telegraphed 
to  London,  and  received  a  reply.  I  was  a  good  deal  struck  with  his 
statement,  and  admitted  that  there  was  great  force  in  it.  But  it 
does  not  seem  to  me  to  be  a  quite  conclusive  inference.  The  fact 
seems  to  me  to  point  quite  as  much  to  what  I  have  already  referred 
to,  that  as  Great  Britain  is  a  centre  to  which  merchantable  goods 
are  transmitted,  and  in  which  they  are  purchased,  so,  even  if  a 
stock  were  not  procurable  in  plenty  on  the  London  Exchange,  it 
would  be  highly  expedient  to  get  a  price  from  thence,  because  a 
price  in  a  central  mart  is  the  best  price  which  can  be  got  any- 
where, and  because,  for  reasons  which  I  will  give  you  later  on,  the 
London  Exchange  has  a  power  of  attracting  both  goods  and 
securities  to  an  extent  and  rapidity  which  is  possessed  by  no  other 
analogous  institution. 

The  exports  and  imports  of  England,  then,  after  1706,  of  Great 
Britain,  and  since  1800,  of  the  United  Kingdom,  have  been  an 
object  of  great  curiosity,  and  not  a  little  concern  to  economists  and 


ALABM8  ABOUT  EXPORTS  AND  IMP0ET8,  391 

statesmen,  the  latter  having  learned  from  the  former,  very  slowly 
and  with  great  hesitation,  what  is  the  interpretation  whioh  should 
be  given  to  them.  Now  from  the  very  first  it  was  seen  that  the 
exports  must  pay  for  the  imports,  though  in  early  times,  under  the 
theory  of  the  balance  of  bargain,  and  by  the  machinery  of  the 
king's  exchanger,  persistent  attempts  were  made  to  secure  that  this 
country  should  deiiv'e  a  money  profit  on  the  aggregate  of  the 
country's  commercial  transactions.  I  described  to  you  in  an  earlier 
lecture  on  metallic  currencies  how  futile  the  attempt  was,  and 
how  it  was  inevitably  baffled  in  the  interests  of  trade.  But  though 
every  merchant  saw  that  as  far  as  he  was  concerned,  the  vital 
object  was  to  get  a  balance  of  profit,  and  quite  a  subordinate  and 
temporary  matter  to  secure  a  balance  of  cash,  the  dread  that  we 
should  be  drained  of  all  our  money  by  an  adverse  balance  of 
trade,  as  it  was  conceived  to  be,  affected  merchants  collectively, 
and  led,  after  the  old  mechanism  was  abandoned,  governments  to 
adopt,  and  merchants  to  sanction,  various  expedients  for  securing 
that  to  the  mass  of  trade  which  individual  traders  saw  would 
be  mischievous  or  injurious  in  each  individual  trade.  It  is,  as  it 
was,  and  I  fear  as  it  will  be,  very  hard  to  induce  people  to  see 
that  what  their  experience  has  proved  to  be  prudent  in  their  own 
case,  is  prudent  for  the  whole  country ;  and  it  appears  that  this 
is  as  inveterate  an  error  as  the  far  more  mischievous  fallacy, 
that  on  which  I  have  already  commented,  and  shall  often  need 
to  comment,  that  a  private  advantage  should  be  assisted  by 
government  help  at  the  expense  of  the  great  body  of  the 
nation. 

As  long  as  the  trade  of  England  was  confined  to  the  Baltic 
and  the  French  coast,  and  subsequently  extended  to  Seville,  no 
serious  attempt  was  made  to  examine  the  real  principles  which 
underlie  the  balance  of  trade  doctrine.  I  have  little  doubt  that 
the  reason  lies  in  the  individual  evasion  of  that  which  was  still 
conceived  to  be  collectively  sound.  But  with  the  development  of 
the  trade  with  the  East  the  difiiculty  at  once  arose.  It  was  plain, 
and  could  not  be  denied,  that  the  export  of  silver  was  essential  to 
any  trade  at  all  with  the  East  Indies.  India  has  been  engaged 
for  centuries  in  importing  silver,  this  not  being  a  produce  of  the 
peninsula.    Besides  there  was  nothing  produced  in  England  which 


392  INTEBPBETATION  OF  EXPORT  AND  IMPOBT  TABLES. 

could  be  exchanged  against  the  coveted  produce  of  the  East.  It  was 
necessary  that  permission  should  be  given  to  export  silver,  and  the 
concession  was  justified  on  the  ground  that  the  exchange  of  Eastern 
produce  would  bring  back  into  the  country  far  more  silver  than  the 
ships  took  away.  But  this  argument  would  be  equally  valid  in 
favour  of  permitting  the  free  circulation  of  money  between  all 
countries  which  trade  together,  for  trade  is  undertaken  with  a 
view  to  profit ;  and  money  is  the  instrument  by  which  trade  ia 
measured,  and  just  as  in  a  progressive  community  no  more  money 
is  kept  than  is  necessary  for  the  wants  of  commerce,  internal  and 
external,  so  no  country  which  is  not  declining  ever  finds  itself  at 
a  loss  to  procure  all  the  money  which  it  needs  for  its  mercantile 
transactions.  But  though  the  government  of  the  seventeenth  and 
eighteenth  centuries  were  ready  to  allow  the  minor  premiss  in 
their  syllogism  when  India  was  in  their  minds,  they  shrunk  from 
accepting  the  major  premiss,  and  from  allowing  the  consequences 
of  permitting  mercantile  money  to  be  fluid,  a  principle  of  trade 
which  Oresme  saw  to  be  fundamental  as  early  as  the  fourteenth 
century,  and  Koger  North  in  the  seventeenth.  And  so  people 
went  on  speculating  on  imports  and  exports,  and  wondering  when 
the  collapse  would  come,  which  was  evidently  impending  as  long 
as  the  country  imported  more  in  return  than  it  exported.  The 
shrewdest  men  were  alarmed  at  the  risks  of  an  adverse  balance  of 
trade,  and  no  doubt  many  of  the  protective  laws  on  the  English 
Statute  Book  were  enacted  originally,  not  so  much  for  the  purpose 
of  sustaining  particular  interests  at  the  pubhc  cost,  or  the  public 
loss,  but  in  order  to  obviate  what  they  honestly  thought  to  be  an 
impending  danger.  It  may  be  doubted  whether  the  alarm  at  a 
depletion  of  money  is  even  now  an  extinct  delusion.  Of  late  years 
I  would  fain  hope  ignorantly,  the  old  doctrine  of  the  balance  of 
trade  has,  it  appears,  taken  possession  of  some  people's  minds,  or 
what  is  called  their  minds. 

A  nation,  like  an  individual,  can  spend  more  than  it  earns.  It 
often  does  so,  through  the  action  of  its  government,  in  this  case, 
collectively.  It  cannot  do  so,  by  the  whole  number  of  its  people, 
distributively,  else  it  would  exhaust  itself.  If  some  people  in  a 
community  are  wasteful,  others  who  are  not  wasteful  get  the  pro- 
duct of  their  waste.     I  do  not  mean  to  say  that  a  nation  may  not 


CAUSES  OF  THE  DECLINE  OF  NATIONS.  893 

decline  from  opulence  to  poverty,  even  to  nothingness.  Many 
parts  of  the  earth  were  once  occupied  by  rich  and  industrious 
peoples  which  are  now  wholly  waste.  Such  a  decline  may  come 
from  the  effect  of  a  destructive  conquest,  of  long  and  ruinous  wars. 
But  in  almost  all  cases,  the  ruin  of  a  race  is  the  fault  of  its  govern- 
ment. The  exigencies  of  society,  perhaps  its  weakness,  compel 
nations  to  have  governments.  Men  should  be  eternally  on  the 
watch  against  them  as  Mr.  Mill  argues.  Nations  will  not  ruin 
themselves,  said  Adam  Smith,  but  governments  may  ruin  them. 
If  a  nation  through  this  agency  spends  more  than  it  can  earn,  it 
inevitably  begins  to  decline,  and  if  the  process  goes  on  too  far  the 
nation  is  exhausted  and  perishes.  This  happened,  it  appears,  witli 
whole  districts  of  the  Eoman  Empire.  The  military  government 
of  Kome  spent  the  resources  of  its  subjects,  and  wide  parts  of  the 
world  became  desolate.  I  will  not  say  that  spectacles  of  this  kind 
will  never  be  seen  again,  of  nations  perishing  by  the  vices  of  those 
who  administer  its  affairs.  But  such  a  consummation  is  not  dis- 
played in  the  exports  and  imports  of  a  people,  for  the  very  signij&- 
cant  reason  that  the  process  I  have  referred  to  leaves  the  mise- 
rable community  nothing  wherewith  to  traffic,  every  energy 
remaining  being  devoted  towards  the  mere  sustentation  of  life  in  a 
declining  population.  In  modern  times,  the  malevolence  of  a 
government  rarely  goes  further  than  to  arrest  the  natural  progress  of 
a  people. 

There  are  occasions  in  which  a  government  spends,  not  more 
than  perhaps  its  people  could  pay,  but  more  than  it  is  politic  to 
exact.  In  such  a  case  it  borrows.  It  may  borrow,  as  has  been 
done  in  England,  from  its  own  people,  that  is,  from  those  whom  in 
theory  it  might  tax,  but  does  not  think  it  would  be  wise  or  just  to 
put  to  such  sacrifices.  Or  it  may  borrow  from  other  people,  where 
there  are  large  stocks  of  accumulated  capital  in  existence,  the 
owners  of  which  can  be  induced  to  part  with  their  property  on  con- 
dition of  the  borrowing  government  paying  interest  on  the  loan. 
Governments  may  borrow  for  the  purpose  of  carrying  on  a  war,  or 
of  defending  themselves  against  aggression.  The  government 
generally  asserts  that  it  is  the  latter  motive  which  influences  it, 
when  every  one  sees  that  it  is  the  former.  Whether  their  subjects 
or  citizens  see  it  or  not,  governments  generally,  almost  invariably. 


804  INTEBPBETATJON  OF  EXPOBT  AND  IMPORT  TABLES. 

avow  it  so  persistently  or  savagely,  that  their  subjects  are  brought 
to  agree  with  them.  Or  they  may — as  is  constantly  done  in  new  and 
thriving  communities,  where  there  is  plenty  of  use  for  all  the  capital 
which  the  country  has,  with  a  good  profit — borrow  in  order  to 
develop  the  public  works  which  are  a  great  assistance  to  the 
employment  of  such  capital  as  they  do  possess.  In  such  countries, 
to  borrow  from  their  own  people  would  be  to  cripple  themselves, 
and  to  procure  what  they  want  on  far  less  advantageous  terms  than 
they  may,  if  their  credit  is  good  and  the  security  stable,  in  other 
countries.  This  is  the  way  in  which  most  of  our  colonies  have 
borrowed  of  us  for  their  public  works,  railways,  docks,  harbours, 
and  the  like.  Now  it  will  be  plain  that  in  all  these  cases,  the  future 
earnings  of  the  people  are  pledged  to  pay  interest  on  the  past  out- 
lay of  the  government.  I  say  earnings,  for  we  know  by  this  time, 
that  all  wealth  is  the  product  of  capital  and  labour,  though  in  the 
distribution  of  that  which  is  earned,  others  besides  the  capitalist 
and  labourer  are  sure  to  share.  Such  is  the  origin  of  public  debts. 
You  will  see  that  they  are  represented  by  very  different  present  facts. 
In  most  cases  and  in  old  countries,  there  is  nothing  to  show  for  the 
debt,  in  the  shape  of  property.  In  some,  especially  in  new  coun- 
tries, there  may  be  very  solid  and  valuable  assets,  the  value  of 
which  may  be  increasing.  But  in  every  case  the  country  which 
holds  the  debt  is  supposed  to  obtain  interest  on  it.  The  amount  of 
foreign  debt  held  in  England  is  enormous.  In  Stock  Exchange 
securities  there  are  said  to  be  two  thousand  millions,  known  or 
ticketed  as  English  property.  But  this  by  no  means  exhausts  the 
debts  owed  to  people  who  live  or  accumulate  in  the  United  Kingdom. 
English  capital  has  gone  over  the  whole  world.  English  houses  of 
business  are  settled  in  most  countries,  and  the  profits  due  from  them 
are  part  of  the  indebtedness,  which  has  to  be  annually  paid.  You 
will  see,  then,  that  every  year  a  vast  amount  of  cash  or  property 
has  to  be  imported  into  England  to  pay  the  annual  charge  of 
foreign  debt  held  here. 

Now  let  us  see  how  this  affects  imports  and  exports.  There  is, 
we  may  be  sure,  quite  apart  from  the  operations  which  I  have 
described,  a  certain  amount  of  trade  going  on  between  England  and 
another  country,  say,  for  instance,  cloth  of  English  make  to 
Australia,  wool  of  Australian  growth  to  England.     If  this  were  the 


EFFECTS  OF  DEBTS  ON  EXPOBTS  AND  IMPOBTS.    395 

only  business  going  on,  these  two  articles  would  infallibly,  what- 
ever the  figures  may  allege,  of  which  presently,  balance  each 
other,  i.e.,  the  English  cloth  and  the  Australian  wool  are  an  equation, 
for  otherwise  trade  is  inconceivable.  But  the  efi'ect  of  these  borrow- 
ings and  payments  of  interest  creates  an  apparent  confusion.  The 
loan  is  not  paid  in  money,  but  in  goods ;  for  it  is  to  the  interest 
of  both  parties  that  it  should  take  the  latter  form,  since  both  the 
producer  and  exporter  and  the  consumer  and  importer  get  a  profit 
from  the  transaction.  Now  if  many  such  loans  are  made  in  a  short 
space  of  time,  the  volume  of  exports  is  greatly  increased,  the  pro- 
duction of  the  exporting  country  is  greatly  stimulated,  and  trade  is 
exceedingly  active.  Such,  for  example,  were  the  exports  of  England 
to  America  after  the  Civil  War,  and  to  France  after  the  Franco- 
German  war,  when,  as  was  said  by  Mr.  Gladstone,  trade  progressed 
by  leaps  and  bounds.  Goods  went  out  and  debts  came  back,  for 
whenever  the  expenditure  of  a  country  exceeds  its  production,  it 
takes  goods  and  export  securities.  Now  the  goods  appear  in  the 
exports,  the  securities  do  not  appear  in  the  imports.  Hence  the 
appearances  are  all  on  the  side  of  the  country  whose  trade  has  been 
so  stimulated.  When  you  look  below  the  surface,  you  will  find,  as 
I  have  shown  you,  that  the  country  has  been  giving  away  its 
property,  for  pieces  of  paper  on  which  the  indebtedness  of  the  other 
country  is  expressed.  These  securities  are  of  course  transferred 
from  those  who  received  them  in  payment  of  their  goods  to  those 
who  accept  them  as  investments. 

But  in  course  of  time,  especially  in  the  case  of  a  country  which 
goes  on  lendiQg,  as  this  country  has  done  for  a  long  series  of  years, 
the  interest  payable  on  these  loans  exceeds  all  the  new  loans  which 
are  made  in  any  one  year.  Thus  if  the  rate  of  interest  on  the  loans 
I  spoke  of  is  4  per  cent.,  the  annual  interest  is  80  millions,  and 
to  this  we  may  add  20  miUions  more  for  profit  on  investments 
which  do  not  pass  through  the  Stock  Exchange.  Now  100 
millions  sterling  would  be  a  vast  sum  to  lend  every  year.  Sup- 
pose the  loans  cease,  because  the  colonists  and  foreigners  do  not 
want  to  borrow  any  more,  or  our  people  do  not  feel  inclined  to 
lend.  The  valuing  of  what  I  may  call  natural  exports  and  imports 
remains  unchanged,  but  the  latter  is  swollen  by  the  compulsory 
imports  which  are  sent  to  this  country  in  payment  of  interest,  for, 


80G  INTERPEETATION  OF  EXPORT  AND  IMPORT  TABLES. 

as  before,  the  payment  is  not  made  in  money,  but  in  goods.  To 
find  fault  with  its  appearance  in  what  people  call  the  national 
balance  sheet  of  industry  and  trade,  is  to  find  fault  with  the  debtors 
of  the  country  for  paying  the  interest  on  their  debt  which  they 
agreed  to  pay,  and  to  adopt  any  means  which  would  put  a  hin- 
drance or  a  stopper  on  these  exports  is  to  provoke  the  debtor  into 
repudiating  his  debt,  because  the  creditor  country  has  thought 
proper  to  make  it  diflBcult  for  him  to  pay  it.  Wherever  any  country 
is  a  large  foreign  creditor,  and  the  dividends  on  the  debt  which  it 
holds  are  paid  punctually  by  its  creditors,  its  imports  will  greatly 
exceed  its  exports,  for  these  exceptional  imports  represent  the  divi- 
dends which  it  has  to  receive.  The  quantity  of  imports  is  heigh- 
tened if  the  dividends  are  due  from  non-productive  debts,  for  here 
the  imports  are  of  the  profits  only  made  on  the  goods  sent,  whereas 
when  the  dividends  come  from  productive  debts,  the  profit  paid  on 
the  investment  in  the  borrowing  country  is  included  in  the  payment, 
and  may  or  does  represent  the  whole  value  of  the  goods.  You  will 
see,  therefore,  that  a  vast  excess  of  imports  over  exports  does  not 
mean  that  the  country  is  spending  more  than  it  receives,  but 
just  the  contrary,  receiving  more  than  it  spends,  and  receiving 
it,  as  I  shall  take  occasion  to  show,  in  the  most  advantageous 
manner. 

There  are,  to  be  sure,  occasions,  I  have  already  stated  what  they 
are,  in  which  a  country  is  spending  more  than  it  earns  or  produces. 
But  the  evidence  of  this  is  always  being  made  clear  to  those  quick- 
witted people  whose  business  it  is  to  explain  the  movements  of 
Stock  Exchange  property.  Such  a  country  exports  securities,  or, 
as  some  people  say,  throws  them  on  the  market,  where  they  do  not 
generally  experience  very  favourable  treatment,  for  the  operation 
is  invariably  followed  by  a  fall  in  their  market  value.  Now,  it  is 
perfectly  certain  that  English  holders  are  not  doing  this.  There 
is  plenty  of  loanable  money  in  England,  rather  too  much,  as  people 
desiring  to  invest  will  pathetically  tell  you,  when  they  can  only 
get  a  low  rate  on  sound  investments.  For  though  the  rate  of 
discount  and  the  rate  of  interest  are  not  influenced  by  the  same 
causes,  they  are  parts  of  the  same  aggregate,  and  what  persistently 
affects  the  one  is  sure,  in  the  long  run,  to  afiect  the  other.  Be- 
sides, if  there  were  a  strong  desire  to  part  with  some  of  these  in- 


EFFECTS  OF  THE  COST  OF  FBEIGHT.  397 

vestments,  and  to  tliereupon  export  them,  they  would  be  exported 
in  exchange  for  other  investments  which  are  more  sound  or  other- 
wise more  attractive. 

But  there  is  a  further  fact  below  these  returns  of  exports  and  im- 
ports which  cannot  be  exhibited,  but  must  be  recognized.  When  an 
article  is  imported  into  London  its  value  is  declared,  and  I  will  as- 
sume, for  the  sake  of  argument,  accurately  declared,  at  the  port  of 
entry.  When  an  article  is  exported  from  London  its  Value  is  de- 
clared at  the  port  of  exii.  Now,  in  the  first  case,  the  import,  its  cost 
of  carriage  or  freight,  is  included.  But  in  the  other,  the  export, 
the  cost  of  freight  is  not  included,  for  it  is  not  yet  defrayed. 
Hence  the  value  of  the  imports  is  always  increased  by  freight,  that 
of  exports  lessened,  as  far  as  freight  is  concerned.  The  freight 
must  be  included  in  the  import,  for  it  is  part  of  the  cost.  But  in 
the  export,  it  is  expected  that  the  market  of  destination  will  pay 
the  cost,  and  in  the  end  it  does  so,  else  the  trade  would  not  be 
worth  having.  This  addition  to  values  is  called  by  Mr.  Giffen, 
very  felicitously,  the  invisible  export  and  import.  In  an  earlier 
lecture,  I  took  a  hypothetical  figure,  10  per  cent,  all  round,  as 
representing  the  cost  of  freight.  I  find  that  it  has  recently  been 
calculated,  by  different  persons,  of  high  eminence  in  such  esti- 
mates, at  from  11  to  15  per  cent.  Now,  in  interpreting  the 
relation  of  exports  and  imports,  this  addition  to  value  which 
does  not  appear,  except  on  analysis,  is  of  great  significance,  and 
must  be  reckoned.  If  it  represented  foreign  shipping,  or  freight 
earned  by  foreigners,  it  would  still  appear  in  the  article  which  has 
been  shipped,  but  the  profit  contained  in  the  price  would  be  ap- 
propriated by  foreign  capitalists.  As  it  is,  the  shipping  owned  by 
British  capitalists  is  70  per  cent,  of  that  engaged  in  the  carry- 
ing trade,  despite  foreign  Navigation  Acts,  and  is  therefore  a  British 
asset  in  the  volume  of  exports  and  imports,  not  the  less  real  because 
it  is  invisible. 

But  there  is  a  further  item  in  the  account  which  needs  explana- 
tion. I  have  already  stated,  that  owing  to  its  free -trade  policy, 
this  country,  excepting  some  half-dozen  items,  is  a  free  port. 
Owing  to  its  prodigious  mercantile  operations,  it  is  the  market 
which  gives  the  price,  and  the  market  that  gives  the  price  attracts 
the  dealer.     But  if  the  dealer  is  attracted  the  commodity  dealt  in 


dOS  INTEBPBETATION  OF  EXPOBT  AND  IMPOBT  TABLES, 

is  attracted.  Furthermore,  even  in  those  articles  which  are  liahle 
to  duty,  the  system  of  bonding  warehouses  is  so  perfect  and  so 
easy,  that  the  United  Kingdom,  even  for  duty  paying  and  excise- 
able  articles,  is  virtually  a  free  port.  I  ought  perhaps,  however, 
as  you  cannot  be  supposed  to  be  conversant  with  the  mechanism 
of  trade,  to  say  a  little  about  the  warehousing  system. 

In  old  times,  all  goods  imported  and  exported  equally  paid  cus- 
toms. The  system  probably  arose  from  the  theory,  that  the  king 
by  viixtue  of  his  position  as  commander-in-chief  of  the  national 
forces  was  under  the  duty  of  defending  the  narrow  seas,  and, 
indeed,  English  commerce  wherever  it  went.  In  time,  the  cus- 
toms became  part  of  the  private  revenue  of  the  Crown,  and  the 
duty  of  maritime  defence  was  imposed  on  the  Cinque  Ports,  then 
on  the  whole  mercantile  marine  of  the  kingdom,  and  by  ship-money 
on  the  inland  counties.  The  reason  for  this  extended  impost  was 
plausible,  and  had  the  tax  possessed  a  lawful  origin,  conclusive ; 
for  if  a  country  is  to  have  any  trade  at  all,  there  must  be  a  police 
of  the  seas.  So  clearly  is  this  recognized,  that  there  is  no  part  of 
the  law  of  nations  more  indisputable  than  the  dictum  that  piracy 
is  an  offence,  not  only  against  the  person  who  is  plundered,  but 
against  civilization  in  general,  every  state  by  the  law  of  nations 
being  entitled  to  attack,  capture,  and  punish  pirates  on  the  high 
seas.  But  the  English  were  very  slow  to  accept  a  principle  which 
accorded  iU  with  their  practice.  As  I  have  often  stated,  our  early 
maritime  heroes  were  all  pirates,  and  even  after  the  government 
determined  on  putting  down  the  practice,  and  actually  hanged  a 
number  of  adventurers  who  became  a  scandal  to  it,  mainly  because 
they  had  originally  been  sent  out  by  government,  and  had  been 
old-fashioned  enough  to  strain  their  commission  ;  even  after  this,  I 
say,  a  preliminary  apprenticeship  in  this  lucrative  and  invigorating 
business  was  no  bar  to  the  subsequent  employment  of  a  buccaneer, 
who  had  abandoned  his  special  calling,  in  Church  and  State. 

It  was  very  difficult  to  get  rid  of  customs  on  exports.  Nations, 
like  individuals,  overrate  their  own  importance,  and  the  import- 
ance of  their  own  doings,  and  are  apt  to  conclude  that  when  a 
foreign  trader  wishes  to  do  business,  he  represents  a  foreign  neces- 
sity, instead  of  a  prospect  of  making  a  profit.  Besides,  there  had 
been  a  time,  long  remembered,  in  which  the  demand  was  a  ne- 


CUSTOMS  AND  BONDED  WABEHOUSES,  899 

cessity,  and  England  conld  carry  on  a  war  with  a  wool  tax,  which 
the  consuming  country  paid.  Nothing  is  harder  to  persuade  cer- 
tain governments  than  that  they  do  themselves  mischief  by  levying 
export  duties.  Again,  it  was  the  object  of  government  to  naturalize 
manufactures  in  England.  They  saw  clearly  enough  that  a  dozen 
pounds  of  cloth  was  worth  several  times  over  a  dozen  pounds  of 
wool,  and  a  prohibitive  duty  on  the  export  of  wool  seemed  the  best 
way  of  stimulating  the  home  manufacture  of  cloth.  An  export 
duty,  therefore,  seemed  to  be  a  form  of  patriotism,  and  it  is  almost 
impossible  to  reckon  up  the  list  of  crimes  and  foUies  which  have 
been  committed  under  the  plea  of  patriotism.  And,  lastly,  it  was, 
and  had  been,  from  the  earliest  times,  a  branch  of  the  revenue.  Now, 
it  is  true  that  the  management  of  the  revenue  has  been  under- 
taken by  the  Parliament.  But  the  fiction  of  the  king's  taxes  seemed 
to  imply  a  kind  of  property  in  these  imposts,  and  more  reasonably, 
it  was  seen  that  if  one  branch  of  revenue  be  remitted,  another,  and 
a  new  tax,  must  be  put  in  its  place. 

Walpole,  George  the  Second's  great  finance  minister  for  nearly  a 
quarter  of  a  century,  saw  that  if  he  coulS  establish  a  system,  under 
which  foreign  duty-paying  goods  could  be  put  under  lock  and  key, 
and,  for  the  matter  of  that,  exciseable  home  products  as  well,  the 
duty  and  excise  being  paid  only  when  the  articles  were  taken  out 
for  consumption,  he  would  save  the  pockets  of  the  consumers  of 
goods  in  Great  Britain,  and  do  a  great  deal  towards  making  this 
country  a  free  port  for  all  produce,  for  he  contemplated  allowing 
these  foreign  goods  to  go  out  free  of  customs.  But  Walpole,  hke 
other  statesmen  of  very  comprehensive  views,  had  a  good  many 
enemies,  who  were  discontented  with  his  ascendancy,  and  when  he 
propounded  his  new  Excise  and  Customs  Bill,  these  enemies  found 
their  opportunity.  They  wanted  a  pretext  for  humbling  him,  and 
if  he  had  brought  forward  the  Ten  Commandments,  they  would  have 
tried  to  raise  an  outcry  against  them.  The  great  London  mer- 
chants were  under  the  impression  that  if  the  warehousing  system 
were  permitted,  persons  of  small  capitals  would  become  their  rivals 
in  business,  as  they  would  be  relieved  of  the  necessity  of  paying 
duties  at  the  moment  of  importation,  and  could,  therefore,  carry 
on  business  with  less  cash.  Walpole,  who  loved  office  more  than 
he  did  financial  good  sense,  when  the  retention  of  the  one  and  the 


^00 INTEBPBETATION  OF  EXPOBT  AND  IMPOBT  TABLES, 

exhibition  of  the  other,  were  incompatible,  yielded  to  the  clamour, 
lu  the  same  way  the  younger  Pitt  sacrificed  financial  justice  to 
office,  when  he  yielded  to  the  country  gentlemen  on  the  legacy 
duties.  Perhaps  statesmen  may  be  pardoned  for  considering  them- 
selves to  be  a  necessity.  It  is  not  in  human  nature  to  resist  the 
flattery  which  assures  them  that  they  are. 

I  have  no  doubt  that  had  Walpole's  project  succeeded,  his 
poUcy  would  have .  been  identified  with  the  rapid  progress  of 
English  commerce.  Like  every  financial  expedient  of  the  time, 
the  idea  of  bonding  goods  was  derived  from  the  practice  of  the 
Dutch,  in  the  days  of  their  commercial  prosperity.  But  by 
this  time  the  Prussian  and  the  British  monarchy  were  doing 
their  very  best  to  ruin  Dutch  trade,  Dutch  credit,  and  Dutch 
finance.  At  last  they  succeeded,  to  the  disgrace  of  both  countries. 
But  even  if  the  scheme  had  been  adopted,  people  were  still  so 
stupid  that  they  believed  that  the  only  prosperous  trade  was  one  in 
which  the  visible  sum  of  exports  exceeded  in  value  the  visible  sum 
of  imports,  ie,,  that  people  are  prospering  when  they  give  more  in 
value  than  they  receive.  There  are  such  people  in  existence  even 
now.  Mr.  Giffen,  in  his  excellent  essays  on  finance,  states  that 
he  read  an  alarmist  calculation  in  which  the  writer,  having  counted 
up  the  difference  between  exports  and  imports  for  twenty  years, 
came  to  the  conclusion  that  the  English  nation  had  run  into  debt 
with  foreigners  to  the  extent  of  1,000  millions,  and  that  ruin  was 
imminent.  The  writer  was  not  aware,  of  course,  that  during  this 
time  England  had  been  constantly  lending,  and  not  borrowing,  and 
that,  were  this  terrible  process  of  debt  going  on,  there  would  have 
been  daily  evidence  of  it  on  the  Stock  Exchange.  You  are  now 
aware  that  if  a  community  has  credit  enough  to  get  into  debt,  and 
cannot  pay  in  goods,  it  pays  by  the  export  of  securities,  i.e.y  by 
pledges  to  liquidate  indebtedness  at  a  future  date.  "We  in  England 
have,  however,  been  constantly  importing  securities. 

Now  a  considerable  quantity  of  what  we  import  we  export  again. 
This  country  has  become,  for  reasons  which  I  hope  that  I  have 
made  plain,  a  great  entrepot  for  foreign  products,  particularly  for 
raw  materials,  by  which  I  mean  such  products  as  are  not  available 
for  consumption.  For  instance,  we  export  an  enormous  amount 
of  cotton  to  other  countries,  apart  from  what  we  consume  our- 


BE-EXPOBTS  AND  THEIB  EFFECTS.  401 

selves.  A  trader  will  deal  in  anything  from  which  he  can  get  a 
profit,  and  naturally  seeks  the  market  in  which  he  knows  that 
prices  are  most  exactly  defined,  and  from  which,  therefore,  he  can 
best  anticipate  his  profit.  This  was  the  case  at  Amsterdam  two 
centuries  ago;  it  is  the  case  with  London  now,  and  not  only 
London,  but  with  many  other  great  centres  of  trade  in  the  United 
Kingdom.  Besides,  not  a  little  of  the  imports  are  absorbed  in 
that  invisible  reservoir  of  the  mercantile  marine — ships  want 
stores,  provisions,  and  a  njimber  of  other  conveniences.  It  is 
reckoned  that  the  annual  cost  of  a  vessel  is  about  £13  12s.  per  ton 
of  freight  capacity,  and  "Mr.  Gififen  reckons  that  the  mercantile 
marine  of  this  country  earns  some  80  milHons  annually  by 
freights.  This  sum  is  added  to  the  value  of  the  imports,  but  is 
not  discerned  in  the  exports.  It  appears  in  them  when  they  are 
landed  at  their  destination. 

It  will  now  be  convenient  to  illustrate  what  I  have  said  by  a  few 
figures,  extracted  from  a  single  year  of  trade.  I  will  take  the  year 
1885,  the  return  for  which  happens  to  be  before  me.  The  imports 
for  this  year  are  valued  at  £376,967,955.  The  exports  of  produce, 
British  and  Irish,  are  valued  in  this  year  at  £213,044,500.  There- 
exports  of  foreign  and  colonial  produce  for  the  same  year  are 
valued  at  £58,359,194.  So  there  appears  to  be  £318,608,761, 
bought  with  £213,044,500,  and  there  remains  £105,564,261  to  be 
accounted  for.  But  you  will  see  that,  in  the  first  place,  one  must 
take  from  the  imports  all  the  cost  of  freight.  At  13  per  cent, 
this  leaves  £56,558,418,  with  which  to  explain  the  interest  on  debts 
held  in  the  United  Kingdom,  and  due  annually  from  foreign 
countries. 

I  do  not  pretend  to  say  that  I  have  given  you  an  exact  analysis 
of  the  figures  which  were  presented  to  Parliament  and  the  public 
as  illustrating  the  foreign  trade  of  Great  Britain  in  1885,  the 
returns  of  which  is  over  590  millions,  for  the  values  are  only 
declared.  They  rest  entirely  on  the  authority  of  the  importers, 
and  as  our  customs  duties  are  not  ad  valorem,  there  is  no  motive 
for  the  importer  to  understate  this  value,  but,  on  the  contrary, 
there  are  motives  for  exaggerating  it.  For  example,  some  years 
ago  there  was  a  very  active  trade  between  this  country  and 
Hamburgh,  in  shipments  of  sherry  from  that  port.    I  do  not 

27 


402  INTEBPBETATION  OF  EXPORT  AND  IMPOBT  TABLES. 

know  whether  the  trade  still  exists,  but  the  attention  of  the  Custom 
House  was  called  to  this  strange  trans-shipment  of  Spanish  wine 
from  a  port  in  the  German  Ocean.  Further  inquiry  led  to  the  dis- 
covery that,  whatever  the  origin  of  the  liquid  might  be,  it  was  not 
Spain,  and,  in  brief,  the  article  was  manufactured  at  Hamburgh, 
from  materials  in  which  the  grape  was  not  included.  Now  if  the 
imitative  and  enterprising  Teuton  who  hoped  to  find  a  market  for 
this  abomination  among  the  too-confiding  Britons  entered  his 
product,  as  he  was  obliged  to  do,  he  would  certainly  give  a  value 
to  the  article  which  the  facts  would  not  justify,  and  experience 
would  not  confirm.  I  give  one  instance  ;  I  might  cite  many.  But, 
on  the  other  hand,  there  is  every  motive  for  not  exaggerating  the 
value  of  the  exports,  for  under  the  protective  tariffs  of  foreign 
countries  ad  valorem  taxes  are  general,  I  had  almost  said  universal ; 
and  in  accordance  with  this  system,  and  in  order  to  prevent  under- 
valuations, Custom  House  officers,  for  example,  in  the  United 
States,  are  empowered  in  the  case  of  goods  imported,  on  which  an 
ad  valorem  duty  is  imposed,  to  elect,  if  they  should  see  fit,  to 
purchase  the  article  at  the  owner's  valuation. 

Again  the  imports  are  those  of  a  year  from  January  1st  to 
December  31st.  But  it  by  no  means  follows  that  they  represent 
consumable  commodities  within  that  year.  There  are  stocks  of 
goods  which  do  not  deteriorate  with  keeping,  some  which  improve 
by  time,  some  which  ultimately  represent,  when  they  are  ex- 
changed, a  different  value  fi'om  that  which  was  declared  at  the 
port  of  entry.  This  may  arise  from  an  over-estimate  of  that  which 
the  dealer  has  to  sell.  This  over-estimate  may  be  in  the  thing 
itself,  or  in  the  turn  of  the  market.  In  short,  the  estimate  of 
imports  is  far  more  liable  to  exaggeration  in  value  than  that  of 
exports  is.  This  is  particularly  the  case  with  raw  materials,  of 
which,  as  is  inevitable,  a  very  large  proportion  of  the  imports  is 
composed.  Besides,  you  will  see  that  the  debtor  country  is  much 
more  obliged  to  sell  than  the  creditor  country  is  obliged  to  buy.  I 
should  be  very  much  surprised,  supposing  one  compared  the 
declared  value  of  imports  with  the  prices  current  of  the  articles  so 
valued,  if  it  were  not  found  that  these  registers  of  business  done 
would  show  less  figures  than  are  given  as  their  value.  Such  an 
examination  would  be  very  laborious,  and  to  me,  at  least,  who 


THE  UNITED  STATES  FIGUBES,  408 

know  the  facts,  would  be  superfluous.  It  is  sufficient  fop  us  to 
know  that  these  elements  of  dubiety  do  exist,  and  why  they 
exist. 

The  country  which  has  the  largest  exports  is  the  United  States. 
To  the  United  Kingdom,  in  1885,  it  exported  in  value  nearly  87 
millions,  and  imported  in  value  31  millions.     In  some  years  the 
discrepancy  is  far  more  considerable.     Now  for  not  a  little  of  this 
produce  the   United   Kingdom  is    only    a    temporary  port,    the 
commodities    purchased  being  trans-shipped  and  distributed  by 
'traders  in  this  country,  and  by  foreign  visitors  to  our  markets. 
The  commodities  which  we  receive  from  the  States  are  chiefly  raw 
materials,  strictly  so  called,  and   among  them  cotton,  corn,  and 
preserved  provisions,   for  food  is    the    raw  material   of   labour. 
Comparatively  few  manufactured   articles,  and   those   mainly  of 
cheap  and  ordinary  construction,  reach  us  from  them.     Now  how 
is  this  discrepancy  explained  ?      But  before  proceeding  to  this,  I 
should  observe  that  it  is  the  custom  in  America,  as  would  be 
natural  under  ad  valorem  duties,  to  value  the  articles  at  the  port  of 
departure,  and  not  at  their  arrival.     Hence  the  American  imports 
do  not,  Hke  ours,  imply,  but  disclaim  the   cost  of  carriage,  and 
therefore,  as  a  question  of  balance,  the  81  millions  should  be  in- 
creased by  this  item.     The  United  States  do  not  tax  freight.     But 
to  give  the  solution  of  these  figures,  on  the  lines  which  I  have 
already  indicated,  and  by  the  facts  of  the  case.     In  the  first  place, 
the  citizens  of  the  United  States  annually  expend  a  large  sum  of 
money  in  travelling  abroad.     There  is  a   considerable  American 
colony  constantly  resident  in  Europe,  and  drawing  on  the  States 
for  their  expenditure.     There  is,  every  year,  a  perfect  host  of 
migratory  Americans  in  Europe,  and  especially  in    the    United 
Kingdom,  looking  up  the  old  country.     It  is  reckoned  that  the  ex- 
penditure of  such  persons  is  not  less  than  from  10  millions  to  15 
milUons  in  excess  of  what  Europeans  expend  in  travelling  about 
America.     Then,  as  is  the  case  with  new  and  growing  countries, 
there  is  a  prodigious  amount  of  interest  due  from  the  States  to 
British  investors,  and  one  may  also  add  a  vast  amount  of  money 
annually  sent  by  the  American  Irish  to  their  kinsfolk  in  Ireland 
itself.     In  every  country  which  progresses  rapidly,  which  adopts 
expensive  means  for  expediting  intercourse  between  distant  parts 


^OilNTEBPBETATION  OF  EXPOBT  AND  IMPOBT  TABLES. 

of  the  same  political  union,  and  does  so  wisely,  if  it  can  afford  it, 
enormous  debts  are  necessarily  and  indeed  advantageously  incurred. 
It  is  said  that  America  has  reduced  her  indebtedness  abroad. 
Undoubtedly  she  has  as  regards  her  public  debt,  which  under  the 
banking  system  of  the  country  is  made  the  basis  of  the  paper 
issues,  and  is  therefore  held  by  bankers  only  in  the  States,  but  the 
loans  created  in  the  United  Kingdom  and  held  here  are  enormous. 
If  we  take  these  two  particulars  into  consideration,  we  can  easily 
see  how  a  difference  of  50  millions  is  accounted  for,  by  the 
expenditure  of  foreign  travel  and  the  payment  of  interest  on 
loans. 

Such  evidence  as  is  forthcoming  on  the  position  of  France  leads 
to  the  conclusion  that  the  people  not  only  save,  but  in  some  degree 
invest  in  foreign  securities,  not  indeed  to  the  extent  which  they 
seem  to  indicate  by  their  protestations,  but  sufficiently  for  my 
inference.  But  the  curious  fact  about  the  French  balance-sheet  is 
the  singular  oscillation  which  there  is  in  the  exports  and  imports 
of  the  country.  From  1862  to  1865  inclusive,  the  exports  were 
greatly  in  excess  of  the  imports ;  from  1866  to  1871  the  reverse 
phenomenon  was  exhibited ;  in  1872  and  1873  the  exports  were 
again  in  excess ;  and  since  that  year  the  ordinary  course  of  trade 
has  been  exhibited,  under  which  the  imports  exceed  the  exports. 
But  the  difference  is  slight.  In  the  first  place,  the  shipping  of 
France  is  very  small,  for  it  is  only  in  tonnage  a  fifteenth  of  the 
British  amount.  But  no  country  which  depends  for  its  carrying 
trade  on  other  nations  can  show  a  large  margin  of  imports  over 
exports,  unless  indeed  it  is  an  extensive  creditor  of  other  nations. 
But  I  must  not  weary  you  with  details  ;  my  object  is  to  show  you 
what  are  the  principles  which  you  must  have  before  you  in  inter- 
preting export  and  import  tables,  and  what  are  the  grounds  on 
which  you  will  hesitate  before  you  accept  superficial  interpretations. 
I  will,  for  the  rest  of  this  lecture,  point  out  what  are  the  errors 
into  which  people  are  apt  to  fall,  who  for  no  worse  motive  than 
alarm,  err  in  interpreting  the  facts,  and  a  few  practical  inferences 
from  the  facts. 

In  an  earlier  part  of  this  lecture  I  mentioned  that  the  system  of 
bonded  warehouses  had  a  considerable  significance  in  making  the 
United  Kingdom  a  free  port  or  market.  A  bonded  warehouse  belongs 


TEE  TBADE  OF  FBANCE.  405 

to  an  individual,  to  partners,  or  to  a  company.  The  owner  or  owners 
store  goods  which  are  liable  to  duties  at  a  rent,  and  are  under 
government  inspection.  The  keys  of  the  warehouses  are  distributed 
among  the  owners  and  the  government  officials,  so  as  to  make  a 
simultaneous  visit  of  the  owners  and  the  revenue  officer  necessary 
when  goods  liable  to  duty  go  out.  I  know  that  the  system  wofks 
well,  that  there  is  neither  smuggling  nor  pilfering  from  these  ware- 
houses, in  which  the  government  license  is  a  notable  addition  to 
the  value  of  the  premises.  Now  a  few  years  ago,  at  the  end  of  a 
session,  the  government  introduced  what  is  technically  called  an 
omnibus  Bill,  one  which  makes  amendments  in  existing  statutes, 
mainly  in  procedure,  a^d  at  the  instance  of  the  departments.  Now 
I  have,  I  hope  not  uncharitably,  a  profound  distrust  of  the  per- 
manent officials  in  London,  in  Edinburgh,  and  even  in  Dublin,  and 
I  always  examined  omnibus  Bills.  I  soon  found  out  that  there 
were  certain  alterations  introduced  into  the  bonding  system  which 
would  infallibly  destroy  the  property  of  these  warehousemen,  so 
as  at  least  to  discourage  them  from  housing  dutiable  goods.  I 
warned  them  of  their  danger.  They  were  no  political  friends  of 
mine,  I  must  confess.  But  I  became  the  Good  Samaritan,  and 
took  care  of  them.  I  do  not  say  that  they  did  me  a  wrong, 
but  I  am  sure  that  I  did  them  a  service,  for  I  compelled  the 
Treasury  to  throw  overboard  its  subordinates  in  name,  its  masters 
in  fact. 

I  have  indeed  adverted  to  some  of  these  errors,  the  misconcep- 
tion as  to  the  place  which  freight  bears  in  declared  values ;  the 
necessity  there  is,  if  the  figures  are  accurate,  for  recognizing  that, 
if  profit  is  to  follow  trade,  the  exports  must  ordinarily  be  below  the 
imports ;  and  the  importance  of  allowing  in  the  imports  what  is  due 
to  the  liquidation  of  interest  on  debt.  But  there  are  other  fallacies 
into  which  the  indiscreet  manipulation  of  figures  may  lead  one. 
We  may  think,  for  instance,  that  because  a  country  is  always 
exporting  much  more  than  its  imports,  that  it  may  be  engaged  in 
a  losing  trade,  or  that  because  the  volume  of  exports  and  imports  is 
a  higher  percentage  in  one  country  than  another,  that  the  progress 
of  the  former  country  is  more  rapid  than  that  of  the  latter.  Or, 
again,  we  may  be  confronted  with  the  fact  that,  in  appearance  at 
least,  we  are  losing  part  of  our  supremacy  in  manufactures,  and 


^OQ  INTEBPBETATION  OF  EXPOBT  AND  IMPOBT  TABLES, 

therefore  run  the  risk  of  a  dechne  in  our  industrial  eminence ;  we 
may  be  pressed  by  the  citation  of  details  ;  we  may  even  find  some 
paltry  and  easily-interpreted  fact  made  the  ground  on  which  to 
urge  national  action  or  a  fundamental  fiscal  change. 

Let  us  eliminate  from  the  declared  value  of  exports  and  imports 
that  which  is  to  be  ascribed  in  the  latter  to  the  liquidation  of 
interest  on  debt,  that  which  must  be  assigned  to  the  cost  of  freight, 
that  which  has  to  be  deducted  in  consequence  of  a  different  custom, 
due  to  traditional  as  well  as  fiscal  reasons,  in  the  valuations 
assigned  to  goods  in  different  countries,  and  let  us  also  discount 
the  motives  which  might  lead  people  in  England,  for  instance,  to 
heighten  the  value  of  that  which  they  import,  on  paper  at  least, 
whatever  may  ensue  on  the  market  when  they  sell.  To  these  we 
may  add,  as  disturbing  causes,  the  inclination  which  people  have 
to  make  a  sacrifice  in  order  to  gain  a  footing.  Traders  know  that 
a  large  business  on  a  small  profit  is  better  than  a  small  business  on 
a  large  profit.  I  have  been  told  that  the  great  business  which  Mr. 
Whitely  has  established  makes  only  5  per  cent,  on  a  turnover  of  a 
million.  Now  part  of  the  machinery  by  which  people  make  busi- 
ness, in  the  hope  of  establishing  a  wide  connection,  and  of  associat- 
ing the  habit  of  customers  or  the  fashion  of  the  public  with  their 
undertakings,  is  to  incur  a  certain  present  loss,  with  a  view  to 
future  gain,  for  example,  to  advertise  extensively,  to  pay  large 
rents  for  the  opportunity  of  display,  and  the  like.  I  have  heard,  on 
the  best  authority,  that  Bradford  light  woollens  were  being  sup- 
planted by  French  articles,  because  the  Bradford  manufacturers 
clung  tenaciously  to  obsolete  fashions  and  materials.  Now,  in  such 
a  case,  a  Protectionist  country  has  a  peculiar  advantage,  for  the 
producers  of  such  a  country  can  press  the  sale  of  their  goods  at  an 
apparent  loss,  and  reimburse  themselves  by  heightening  prices, 
and  lowering  wages,  at  the  expense  of  the  consumer  and  the  work- 
men in  the  country  where  they  carry  on  their  manufacturing 
operations. 

After  all  these  deductions  are  made  from  the  aggregate  of  imports, 
every  country  which  has  by  course  of  time  become  fully  settled, 
and  in  which  a  variety  of  operations  are  naturally  and  necessarily 
— ^not  artificially — carried  on,  will  exhibit  an  excess  of  imports. 
The  difference  is  due,  a  fair  return  being  made  of  prices,  to  the 


FALLACIES  DEBIVED  FBOM  COMPABATIVE  FIQUBE 8.  407 

profit  which  the  traders  make  in  their  business.  Let  me  illustrate 
what  I  mean  in  common  life.  A  trader,  say  a  grocer,  carries  on 
his  business  with  his  own  capital,  on  his  own  premises,  and  with- 
out the  assistance  of  a  loan,  directly  or  indirectly,  from  any  one. 
He  exports  his  capital.  It  passes  away  from  him  in  the  purchase 
of  goods.  He  imports  the  goods.  But  in  the  nature  of  things, 
the  goods  which  he  buys  as  a  trader  figure  in  his  mind,  if  they 
do  not  in  his  books,  at  a  higher  rate  than  that  which  they  cost 
him,  else  he  would  be  carrying  on  his  business  at  no  profit,  but  a 
loss.  He  intends  in  the  very  nature  of  things  that  his  imports 
shall  be  worth  more  than  his  exports,  and  the  higher  he  can  make 
their  value,  the  more  is  the  profit  which  he  contemplates  and,  I  will 
assume,  achieves.  Now  this  illustrates  the  position  of  the  exports 
and  imports  in  the  balance-sheet  of  a  nation  which  really  trades. 
The  imports  are  bought  with  the  exports,  the  transaction,  as  far 
as  the  nation  goes,  being  complete.  If  the  former  did  not  exceed 
the  latter  in  reputed,  and  in  real  as  well  as  reputed,  value,  the 
balance-sheet  would  show  no  profits,  and  the  shareholders  in  the 
concern  would  have  reason  to  be  greatly  alarmed.  The  profit  is  of 
course  increased  if  the  exporting  country  is  obliged,  whatever 
price  may  be  realized,  to  sell  to  the  importing  coimtry,  as  is  the 
case  with  all  debtor  countries. 

People  sometimes  point  to  the  rapid  growth  of  other  countries  as 
a  proof  that  our  own  trade  is  dechning.  For  example,  the  imports 
of  the  United  States  have  increased  during  the  last  forty  years  by 
700  per  cent.,  and  the  exports  between  500  and  600.  But  in  the 
United  Kingdom  the  exports  have  increased  during  the  same  period 
835  per  cent.,  the  imports  (for  the  last  twenty-six,  since  before  this 
date  there  was  no  computed  or  declared  values  given)  186  per  cent. 
Here,  then,  they  may  say,  you  have  a  Protectionist  country  pro- 
gressing at  a  more  rapid  rate  than  a  free  country  does.  Of  course 
concurrent  facts  are  not  necessarily  causes,  and  causes  are  rarely 
single  and  simple.  But  you  will  notice  that  the  United  States  is  a 
country  of  almost  indefinite  expansibility,  and  of  rapid  growth. 
One  of  its  imports,  that  of  adult  and  trained  immigrants,  is  never 
reckoned  in  its  statistics,  but  would  be  in  an  economical  analysis, 
under-estimated  at  100  millions  pounds  a  year,  this  coming  from  the 
old  world.     With  this  mass  of  potential  wealth  annually  put  into 


^OQ  INTEBPBETATION  OF  EXPOBT  AND  IMPORT  TABLES. 

activity  in  that  country,  the  growth  of  trade  is  inevitable.  But  it 
is  recent,  and  is  nothing  as  yet  like  ours.  Forty  years  ago  it  was 
small,  less  than  ours  at  the  beginning  of  the  century.  Even  now 
it  imports  150  millions  as  compared  with  400  of  the  United 
Kingdom,  and  exports  170  millions,  chiefly  raw  material,  as  compared 
with  223  millions.  In  fact,  the  United  Kingdom  has  appropriated  one- 
third  of  the  whole  world's  trade.  Now  it  will  be  plain  to  you  that  if  a 
man  starts  in  business  with  £1,000,  and  at  the  end  of  ten  years  has 
a  capital  of  £10,000,  his  percentage  of  increase  is  greater  than  that 
of  another  who  ten  years  ago  had  £100,000  and  now  has  £200,000. 
But  no  person  would  doubt  which  of  the  two  was  the  more  opulent, 
and  which  was  doing  the  largest  business. 

The  last  subject  in  connection  with  these  statistics  of  exports  and 
imports  which  time  allows  me  to  deal  with,  has  an  historical 
interest  with  me,  for  I  was  constantly  obliged  to  expound  the  facts 
during  my  Parliamentary  connection  with  a  very  large  constituency, 
which  was  also  a  vast  manufacturing  one.  People  are  very  apt  to 
forget  that  London  is  not  only  the  largest  trading  city  in  the  world, 
but  that  it  possesses  the  most  numerous  and  varied  manufactures. 
Now  among  the  industries  which  I  represented,  the  greatest  was 
leather,  and  some  of  my  constituents  constantly  took  counsel  with 
me  as  to  the  alarming  imports  of  leather.  But  before  I  deal  with 
this  matter,  I  must  remind  you  that  raw  material,  in  the  language 
of  economists,  is  any  product  of  human  labour  or  skill,  which  is 
destined  to  be  further  manipulated  by  human  labour  and  skill,  the 
further  operation  being  a  fresh,  and,  in  some  cases,  a  very  large 
addition  to  its  value.  Thus  leather  to  a  tanner  is  finished  goods,  to 
a  saddler  and  shoemaker  raw  material.  Now,  if  a  tanner  cannot 
supply  leather  enough  in  quantity  and  quality  to  keep  saddlers  and 
shoemakers  at  work,  it  is  to  my  mind  hard  to  keep  such  men  out  of 
work  till  the  tanners  can  come  up  to  their  demands  in  these  two 
articles,  and  quite  as  hard  to  keep  people  without  boots  and  shoes 
while  the  master  tanners  are  getimg  an  unnatural  profit  out  of  the 
public  want. 

Now,  we  are  often  told  that  some  article  in  which  we  hoped  we 
should  have  pretty  well  a  sole  market  is  being  imported  into 
England.  When  you  hear  these  statements,  you  may  fairly  ask, 
not  witli  a  view  to  disparaging  your  informant's  veracity,  but  for  the 


ALABMIST  FALLACIES,  409 

sake  of  accurate  information,  Is  it  true  ?  And  it  is  very  often  found 
not  to  be.  A  short  time  ago  it  was  said  that  a  large  area  of  British 
land,  formerly  occupied  for  agriculture  was  now  unoccupied.  On 
inquiry  it  was  found  that  the  proportion  of  unoccupied  land  to 
occupied  stood  in  the  proportion  of  -00006  to  unity.  But  when 
people  are  anxious  to  establish  a  position,  especially  when  they 
think  that,  if  they  succeed,  they  will  be  rescued  from  an  alarming 
or  an  adverse  situation,  it  is  amazing  how  vigorous  their  imagina- 
tion is,  and  how  eagerly  they  enlist  irrelevant  facts,  and  even 
entirely  baseless  fictions,  into  their  cause.  Again,  we  are  told  that 
large  quantities  of  manufactured  iron  from  Belgium  is  being 
imported  into  England.  But  when  I  searched  in  the  expanded 
volume  of  exports  and  imports,  the  fact  was  not  mentioned.  If  the 
import  did  take  place,  it  was  too  trivial  even  for  a  large  volume  of 
details.  I  heard  the  other  day  of  a  man  who  was  alleging  that  £100 
worth  of  Belgian  glass  was  imported  into  England,  where  it  can  be 
produced  5  per  cent,  cheaper  than  in  this  country.  But  is  it  true  ? 
I  am  sure  that  the  carriage  would  be  close  upon  5  per  cent,  of  its 
value,  for  glass  is  a  hazardous  article,  and  if  the  figures  are  as 
stated,  the  English  and  Belgian  producer  can  cry  quits.  But 
granted  that  it  is  true.  There  is,  I  admit,  a  good  deal  of  foreign 
glass  brought  into  England,  much  for  trans-shipment,  on  which  the 
English  trader  makes  a  profit.  I  do  not  see  that  the  profit  should 
cease  till  such  time  as  English  glassmakers  and  workmen  can  or 
will  fill  up  the  void  which  prohibition  would  cause.  Besides,  it  was 
a  raw  material,  wanted  for  something,  and  among  other  matters 
certainly  for  glazier's  work.  Is  the  glazier  to  be  kept  idle  because 
the  glass-blower  will  not  supply  him  with  what  he  prima  facie  wants? 
We  have  become  no  doubt  a  very  clever  people,  having  been,  as 
I  have  told  you  and  proved  to  you,  for  generations,  for  centuries,  as 
far  as  invention  and  adaptation  went,  about  the  stupidest  and 
slowest  race  in  Christendom.  But  we  cannot  as  yet  do  everything 
better  than  our  neighbours.  In  some  cases  the  climate  is  against 
us ;  in  some  cases,  you  will  I  am  sure  pardon  me,  our  want  of 
capacity.  The  English  climate  disables  us  for  weaving  and  dyeing 
silk  as  they  can  in  Southern  Europe,  and  therefore  we  wisely 
import  silk  goods,  givmg  employment  by  this  means  to  tailors,  and 
dressmakers,  and  the  like.    We  have  not  the  taste  of  the  French  in 


410  INTEBPBETATION  OF  EXPOBT  AND  IMPOBT  TABLES. 

knicli -knacks.  We  cannot  rival  the  Italians  in  ornamental  and 
coloured  glass.  The  result  is  visible  even  withm  our  own  limits. 
For  generations  the  Barnsley  damask  weavers  have  been  trying  to 
rival  the  Scotch  and  Irish  in  table  linen,  and  Barnsley  is  a  good 
deal  behind  Dunfermline  and  Belfast.  But  there  is  no  knowledge 
more  valuable  to  man,  I  state,  than  the  knowledge  of  what  you  can 
do  best. 

I  may  further  illustrate  what  I  have  said  by  that  leather  manu- 
facture in  which  I  have  an  historical  interest.  There  was  a  great 
deal  of  leather  imported  into  England  in  1885,  over  6f  millions  in 
value ;  and  a  little  over  4  millions  worth  of  leather  and  leather 
goods  exported.  Now,  not  a  little  of  this  leather,  1 J  millions,  is  re- 
exported, so  that  in  reality  the  balance  apparently  against  us  is 
£500,000,  no  serious  matter  in  such  extensive  transactions.  Now 
when  I  came  to  inquire  into  the  matter,  I  found  that  a  very  large 
portion  of  this  leather  was  partially  tanned  hides.  The  material 
was  in  such  a  condition  that  it  was  not  available  for  manufacturing 
use,  but  the  partial  tanning  made  the  article  more  manageable  and 
more  merchantable  than  raw  or  salted  hides  could  be.  Hence  this 
competition  against  English  labour  turned  out  to  be  in  reality  a 
partial  preparation  for  the  higher  and  more  perfect  skill  of  the 
English  workman,  and,  as  a  distinguished  but  very  ignorant 
politician  has  said,  a  blessing  in  disguise.  Further  research  into 
this  leather  business  disclosed  to  me  that  there  was  only  a  small 
part  of  the  whole  import,  which  for  some  reason  or  the  other  was 
not,  and,  as  yet,  could  not  be  manufactured  in  England.  It  was  a 
produce  of  Pomerania,  and  I  am  glad  that  a  branch  of  the  Teutonic 
race  has  invented  something  besides  metaphysics  and  testimonials. 
Now,  I  cannot  see  why,  if  people  want  shoes,  or  boots,  or  gloves 
made  of  Pomeranian  leather,  English  makers  of  these  useful  articles 
should  be  disabled  from  manufacturing  them,  and  English  cus- 
tomers from  buying  them,  especially  when  English  tanners  cannot 
supply  the  article.  Again,  I  found  that  it  was  a  common  custom 
for  French  dealers  to  buy  and  export  boots  and  shoes  of  Clerkenwell 
and  Southwark  manufacture,  and  having  stamped  them  in  France 
with  the  name  and  trademark  of  well-known  French  firms,  to  re- 
export them  to  England  as  genuine  Paris  goods  for  our  highly 
intelligent  West  End  men  and  women. 


THE  CASE  OF  LEATHEB.  411 

I  have,  I  hope,  pointed  out  to  you  some  of  the  uses  which  can  be 
made  of  exports  and  imports,  some  of  the  errors  into  which  a 
superficial  study  of  them  may  lead  disinterested  inquirers,  and  some 
of  the  fallacies  which  are,  consciously  or  unconsciously,  derived 
from  them  by  interested  parties.  The  latter-named  class  we  must 
constantly  expect.  Painters  and  poets,  says  the  Eoman  Horace,  claim 
much  for  the  efforts  of  their  imaginations.  So,  I  assure  you,  do 
Protectionists. 


XIX, 


THE  ESTATE   OF  THE    CROWN,    AND    THE    DOCTRINE    OF 
RESUMPTION. 

The  earliest  liahilUies  of  the  Crown  estate — The  "king  an  extensive 
agriculturist — The  causes  of  the  risings  against  John,  Henry  Ill.t 
Edward  II. — Provision  for  younger  sons  by  wealthy  marriages — 
The  alien  priories — The  impoverishment  of  the  Crown  during 
Henry  VI.'s  minority — The  partisan  feuds  of  the  fifteenth 
century — The  practice  of  parliamentary  attainders — The  poverty 
of  Edward  F7.,  of  Mary  and  Elizabeth— The  growth  of  the  revenue 
under  James — The  grants  of  Charles  II.—  Davenant  on  BesumptionSf 
and  his  line  of  argument — The  action  of  William  III. — His  want 
of  judgment — The  act  of  Anne — The  present  estate — The  ancient 
interest  in  the  subject  obsolete. 

In  the  early  ages  of  English  history,  the  estate  of  the  Crown  was  an 
object  of  great  interest  to  the  politics  of  the  time.  A  cursory  in- 
spection of  Domesday  will  show  how  large  it  was  in  the  Conqueror's 
time,  and  how  considerable  it  was  in  that  of  the  Confessor.  It  con- 
tained many  manors  and  estates,  many  towns  and  rentals  of  towns, 
besides  large  and  almost  indefinite  rights  of  a  casual  or  extraordinary 
kind.  The  king's  land  revenue  was  very  great,  many  times  in  excess 
of  that  possessed  by  his  richest  fellow  adventurers  and  subjects. 
But  the  estate  of  the  Conqueror  was  not  acquired  without  a  stubborn 
resistance.  The  waste  of  England  after  the  Conquest,  and  by  rea- 
son of  it,  has  not,  I  believe,  yet  been  estimated  from  that  remarkable 
survey  which  the  compilers  of  Domesday  set  in  order  as  a  monument 
to  succeeding  times.  The  author  of  "  The  Dialogue  on  the  Exchequer," 
says,  that  the  Conquest  was  a  wholesale  and  righteous  confiscation, 


EARLIEST  LIABILITIES  OF  THE  CROWN  ESTATE.    413 

but  he  writes  in  the  interest  of  those  who  had  succeeded  to  the 
inheritance  of  the  older  Enghsh  stock,  and  did  not  procure  this 
inheritance  without  an  effort. 

The  estate  of  the  Crown  was,  however,  liable  to  serious  charges. 
It  maintained  the  king's  household,  the  officials  of  his  household, 
and  the  officials  of  the  exchequer.  It  bore  the  charges  of  justice, 
of  such  police  as  the  king  exercised,  no  trifling  matter  among  and 
over  nobles,  who  held  that  their  title  to  the  lands  which  they  had 
won  was  as  good  as  that  of  the  tanner's  grandson  was  to  the  throne, 
and  were  reported  to  have  expressed  themselves  to  that  effect.  It 
was  charged  as  far  as  we  can  make  out  with  the  cost  of  such  an 
army,  or  guards,  as  the  king  collected ;  the  liabiUty  to  service,  except 
in  the  case  of  invasion,  being  disputed  and  disputable.  It  needed 
a  good  deal  of  vigour  to  keep  the  new  nobility  in  check,  and  it  was 
thought  politic  to  use  considerable  severity  when  their  uprisings  were 
anticipated  or  suppressed.  I  believe  I  am  right  in  saying,  that  at 
the  accession  of  Henry  11.,  most  of  the  nobles  of  the  Conquest  had 
been  extirpated.  A  good  many  people  say  now,  that  their  families 
came  here  with  the  Conqueror.  I  believe  that  similarity  of  name, 
how  acquired  one  cannot  tell,  is  commonly  alleged  to  be  evidence  of 
lineage.  But  I  imagine  that  the  descent  of  the  English  people,  high 
and  low,  is  as  confused  as  that  of  the  Jews,  whose  pedigrees 
Nehemiah  vainly  tried  to  investigate.  But  throughout  this  dark 
period  the  estate  of  the  Crown  is  a  substantial  fact,  for  the  record 
of  it,  from  the  date  of  the  second  conquest,  that  of  Henry  11,  is 
contained  in  that  remarkable  series  of  documents  known  as  the  Pipe 
Rolls. 

The  English  sovereign  was  not  only  expected  to  maintain  his 
state,  his  establishment,  and  his  authority,  from  the  estate  of  the 
Crown,  but  to  make  provision  for  his  descendants  from  the  same 
source.  Hence  in  the  earliest  times  you  will  find  that  the  king, 
without  creating  or  intending  to  create  independent  principalities 
for  his  children,  gave  them  parts  of  his  dominions.  Henry  II.  as- 
sociated his  eldest  son  with  him  in  the  kingdom,  and  got  into  such 
trouble  by  it  that  he  did  not,  on  the  young  Henry's  death,  repeat 
the  experiment  with  Richard.  But  Richard  got  Guienne ;  Geoffrey, 
Brittany,  then  a  dependency  on  Normandy ;  while  John,  who  had 
his  first  nickname  from  his  landlessness,  was  made  Lord  of  Ireland. 


414  THE  ESTATE  OF  TEE  CBOWN. 

In  this  reign,  too,  the  fashion  began  of  wedding  the  cadets  of  the 
royal  house  to  wealthy  heiresses,  for  Henry  wished  to  make  a  i^ro- 
vision  for  John  by  betrothing  him  to  the  heiress  of  Gloucester.  We 
shall  see  in  course  of  time  how  general  this  custom  became,  and  how 
much  the  royal  house  intermarried  with  the  English  nobles.  It  is 
said  that  the  custom  of  the  Crown,  in  addressing  all  lords  who  are 
of  and  above  the  degree  of  earl  as  cousin,  originated  at  a  time  when 
the  statement  was  very  much  one  of  fact. 

Land  then,  and  charges  upon  land,  were  the  principal  source  of 
revenue  in  the  king's  estate.     Where  the  king  possessed  manors,  he 
cultivated  them  by  the  agency  of  his  own  bailiffs,  just  as  the  other 
proprietors  did,  and  Hke  them  was  anxious  to  see  that  the  peace 
was  kept,  not  only  in  consideration  of  his  own  authority  as  head  of 
the  State,  but  as  a  producer  of  com,  stock,  and  wool.     This  re- 
markable habit  of  early  English  life — in  which  all  classes,  from  the 
king  to  the  peasant,  were  interested  in  the  successful  pursuit  of  agri- 
culture, a  habit  resumed  on  a  large  scale,  and  with  most  excellent 
results,  in  the  eighteenth  century — was,  I  am  persuaded,  the  chief  rea- 
son why  social  order  was  so  well  maintained  in  England,  and  outrages 
on  property  so  rarely  recorded.    At  two  periods,  then,  of  English  eco- 
nomical history,  very  remote  from  each  other,  the  propertied  classes  in 
land  did  a  great  service  to  agriculture.     In  the  thirteenth  and  four- 
teenth centuries  they  were  the  cause  why,  alone  among  European 
nations,  the  English  were  great  breeders  of  stock,  especially  sheep,  and 
therefore  became  the  sole  source  of  wool,  the  selection  of  which,  as  the 
schedule  of  1454  in  the  Rolls  of  Parliament  informs  us,  had  already 
become  precise  and  varied.     In  the  eighteenth  century,  though  here 
they  mainly  imitated  the  Dutch,  they  again  took  up  with  progressive 
and  experimental  agriculture,  and  carried  the  art  of  husbandry  in 
England  to  perfection.     They  did  not  do  the  like  in  Scotland  or 
Ireland.     Besides,  during  this  long  interval,  though  nothing  new 
was  developed,  nothing  old  was  forgotten.     During  the  long  period 
which  intervenes  between  the  earliest  authentic  records  of  the  older 
English  agriculture,  i.e.,  from  the  middle  of  the  thirteenth  century 
down  to  the  beginning  of  the  seventeenth,  land  and  its  products 
were  well-nigh  the  only  source  of  wealth,  and  by  far  the  largest 
part  of  the  population  was  engaged  in  cultivating  the  soil  regularly, 
while-  the  residue  were  occasionally  occupied  in  the  same  employ- 


THE  KING  AN  EXTENSIVE  AGBICULTUBIST.         416 

ment.  So  universal  an  occupation  was  not  only  due  to  the  fact 
that  land  was,  according  to  our  experience,  scantily  productive,  but 
also  to  its  very  general  distribution.  Every  one,  as  I  have  often  in- 
formed you,  owned  or  occupied  land,  even  in  the  towns.  Most  of  the 
manorial  rentals  show  that  this  was  the  case  in  the  country.  Hints 
and  allusions  make  it  clear  that,  in  a  less  degree,  the  same  fact 
characterized  the  towns,  and  it  appears  that  the  singular  county  of 
the  town,  in  which  a  large  adjacent  area  was  reckoned  in  the  town 
— as,  for  example,  the  whole  county  of  Middlesex  with  London,  a 
district  of  near  3000  acres  in  the  City  of  York,  and  similarly  large 
suburbs  to  Coventry,  Southampton,  and  the  like — are,  so  to  speak, 
survivals  of  an  ancient  association  of  rural  with  urban  life,  the 
peasantry  of  these  country  towns  being  reckoned  with  the  burgesses. 

Now  it  is  manifest  that,  between  the  periods  alluded  to,  there  is 
no  trace  of  economic  or  competitive  rent.  That  in  the  sixteenth 
century,  the  rights  of  the  landlord  were  strained,  there  is  evidence 
in  the  works  of  contemporary  writers.  Hence  the  rent  which  was 
exacted  was  a  customary  payment,  a  fixed  due,  and  I  hold  it  to  have 
been  an  historical  truth,  which  later  researches  of  my  own  have 
entirely  confirmed,  that  rent  was,  as  Adam  Smith  sagaciously  re- 
cognized, a  tax.  In  later  times,  it  became  a  product  of  competition, 
circumstances  having  altered.  But  Smith  was  more  in  the  right 
than  his  critics  were,  who  imported  into  past  usages  the  facts  of 
present  action,  the  common  error  of  ill-informed  persons,  who  have 
no  faculty  of  discerning  what  must  have  preceded  present  habit. 
It  was  also  a  peculiarity  in  these  tenures  that  the  tax  was  un- 
alterable in  itself.  It  might  be  indirectly  enhanced,  and  this 
indirect  exaltation  by  a  fine  on  succession  might  be  a  grievance,  or 
when  the  tenancy  was  a  lease,  renewable  by  corporation  or  in- 
dividual a  progressive  fine,  but  the  old  rent  of  collegiate  or 
corporate  property  is  a  survival,  or  was  till  recently,  of  universal 
custom. 

Now  I  have  referred  to  this  in  order  to  show  that  the  main 
source  of  the  Crown's  ordinary  revenue  was  fixed  dues  and  rents 
arising  from  land,  and  that  this  revenue  was  inelastic,  what  was 
paid  in  the  third  generation  of  the  Plantagenets  being  identical  in 
amount  with  that  which  was  paid  in  the  second  generation  of  the 
Tudors.     I  have,  in  an  earher  lecture,  pointed  out  the  negative 


416  THE  ESTATE  OF  THE  CBOWN, 

significance  of  this  custom  in  refuting  the  common  idea  as  to  the 
effect  of  reputed  changes  in  the  currency,  and  I  have  shown  that 
the  real  change  forced  on  Ehzabeth  by  her  father's  action,  which 
she  was  too  poor  to  practically  revoke,  led  to  the  competitive  rent 
of  the  seventeenth  century.  If  no  encroachment  occurred  on  the 
Crown  estate,  its  income  might  be  computed  with  fair  accuracy. 
It  is  true  that  after  the  rise  in  wages  in  the  middle  of  the  four- 
teenth century  the  Crown,  like  every  other  great  proprietor,  was 
very  seriously  hit,  and  had  constantly  to  appeal,  apart  from  the 
necessities  of  the  first  great  war  with  France,  for  extraordinary 
grants  to  Parliament,  a  practice  which  became  even  more  marked 
during  the  short,  obsaure,  and,  to  the  interpreter  of  fiscal  and 
economical  action,  difficult  reign  of  Henry  IV. 

As  soon,  then,  as  the  system  of  extraordinary  grants  in  Parliament 
became  the  means  for  assisting  the  extraordinary  necessities  of  the 
Crown,  the  importance  of  the  Crown  estate  in  the  eyes  of  the  tax- 
payer, and  the  necessity  of  preserving  it  intact,  becomes  manifest. 
During  the  reigns  of  John  and  Henry  III.,  when  the  greater  part 
of  the  Crown  estate  on  the  Continent  was  lost,  discontent  was 
general  and  energelic.  Nothing,  I  believe,  but  the  opportune  death 
of  the  father  saved  the  son  from  deposition,  and  he  subsequently 
only  escaped  deposition  by  the  judicious  and  patent  good  faith  of 
Edward  I.  With  insufficient  means,  John  had  attempted  to  main- 
tain an  enlisted  army,  officered  by  foreigners,  on  English  soil,  and 
had  strained  the  rights  of  the  Crown  in  doing  so.  Henry  had 
similarly  not  only  impoverished  himself  by  nepotism,  but  had 
engaged  in  a  wild  political  speculation,  with  still  more  insufficient 
means,  and  had  aroused  the  profoundest  discontent  with  his  policy 
throughout  the  kingdom.  He  had  conferred  a  large  and  important 
estate  of  the  Crown  on  his  brothers,  he  had  given  much  to  his 
half-brothers  and  his  wife's  relations,  and  had  finally  bestowed 
another  large  royal  estate  on  his  second  son.  The  earldom  of 
Cornwall  was  soon  re-united  to  the  estate  of  the  Crown,  and  was 
thenceforward  destined  to  a  special  purpose.  More  than  a  century 
later,  the  estate  of  Edmond  reverted  to  the  Crown,  and  was,  with  a 
similar  policy,  preserved  intact.  From  the  time  of  Edward  I.  the 
custom  becomes  general  to  match  the  younger  sons  of  the  king  to 
the  heiresses  of  great  fiefs,  so  as,  I  believe,  to  prevent  for  the 


DISCONTENTS  WITH  JOHN,  HENBY,  EDWABD  II.     417 

future  any  notable  alienation  of  the  Crown  estates  by  way  of 
appanage,  for  it  was  impossible  to  prevent  dangerous  intrigues  on 
the  part  of  cadets  of  the  royal  house,  as  was  the  case  with  Lancas- 
ter in  Edward  11. 's  reign,  with  John  of  Gaunt  in  the  time  of  Edward 
III.,  with  Gloucester  in  that  of  Richard  II.,  and  with  Humphrey 
of  Gloucester  in  that  of  Henry  VI. 

The  first  serious  outbreak  consequent  upon  discontents,  which 
led  to  entire  distrust  in  the  king  and  his  court,  and  were  caused,  I 
believe,  by  the  indiscreet  impoverishment  of  the  Crown  on  behalf 
of  favourites,  was  the  action  of  the  opposition  faction  in  the  case  of 
Gaveston  first,  and  the  Despensers  afterwards.  The  petulance  of 
Gaveston,  and  the  arrogance  of  the  younger  Despenser,  would  have 
hardly  led  to  such  serious  issues  had  not  the  public  felt  that  they 
were  rumiing  the  risk  of  making  up  the  void  which  was  caused  by 
the  lavish  way  in  which  these  people  were  enriched  at  the  expense 
of  the  Crown.  The  counter  revolution  of  the  palace  which,  shortly 
after  Edward's  deposition,  overthrew  Mortimer,  was  similarly 
instigated  by  the  extensive  appropriations  of  Isabella's  favourite, 
and  the  re-appearance  of  an  offence  which  was  punished  so 
effectually  in  a  previous  reign. 

Edward  III.  provided  generally  for  his  sons  by  marriages  with 
heiresses,  and  it  is  not  improbable  that  the  constant  dying  out 
of  royal  stocks  may  have  been  due  to  the  prevalence  of  this  custom. 
Thus  his  eldest  son,  Edward,  married  the  heiress  of  Kent ;  his 
second,  Lionel,  the  heiress  of  the  De  Burghs,  the  owners  of  Ulster ; 
his  third,  the  heiress  of  the  house  of  Lancaster.  I  cannot  but 
detect  in  this  an  anxiety  to  provide  for  a  numerous  family  from 
other  sources  than  the  Crown  estate.  It  was  better,  said  the  critic 
of  the  times  of  Henry  VI.,  that  the  king  should  have  married  from 
among  his  own  people,  than  to  have  brought  a  furious  foreign 
woman  into  the  royal  house  who  added  nothing  to  its  wealth,  but 
impoverished  it.  Again  the  discontent  felt  at  the  promotion  and 
enrichment  of  De  Vere  by  Richard  II.  and  the  extravagance  of  his 
household,  as  in  the  days  of  his  great-grandfather,  led  in  the  end  to 
the  revolution  of  1399,  as  former  practices  of  the  same  kind  did  to 
that  of  1327. 

But  it  was  in  the  fifteenth  century  that  the  great  impoverishment 
of  the  Crown  estate  began.     Henry  IV. ,  who  had  married  an  heiress 

28 


418  THE  ESTATE  OF  THE  CBOWN. 

of  the  house  of  Bohun,  merged  the  honour  of  Lancaster,  with  its 
very  widespread  possessions,  in  the  estate  of  the  Crown,  though  it 
was  kept,  and  has  thenceforward  been  kept,  distinct  from  the  rest 
of  the  Crown  estate.  But  Henry  was  incessantly  in  difficulties. 
He  had  troublesome  wars,  disturbances  in  Wales  which  he  failed 
to  overcome,  civil  war  with  the  Percies  and  their  adherents,  with 
whom  he  was  more  successful.  But  these  troubles  do  not  seem  to 
me  to  account  for  the  singular  straits  to  which  this  monarch 
was  reduced,  straits  which  had  no  parallel  in  any  other  reign. 
The  age  was,  no  doubt,  lavish  and  extravagant  to  excess  among 
the  upper  classes,  as  contemporary  testimony  avers.  I  can 
account  for  the  fact  only  m  this  way.  Henry  had  to  provide  for 
a  numerous  family,  and  the  hereditary  revenue  of  the  Crown  was 
inadequate  for  this  and  for  his  other  expenses.  The  language  of 
his  Parliaments  seems  to  indicate  that  the  charges  of  his  house- 
hold were  more  than  ordinarily  great. 

His  son  added  to  the  estate  of  the  Crown  the  lands  of  the  alien 
priories.  Some  of  these  he  sold,  others  remained  for  a  consider- 
able time  in  the  hands  of  the  Exchequer.  I  have  never  been  able 
to  discover  the  extent  of  this  addition  to  the  Crown  lands,  and  we 
only  know  the  destination  of  two  parcels  of  this  considerable 
dissolution.  Some  were  bought  by  Chichele  for  his  two  Oxford 
colleges,  and  the  foundation  at  Higham  Ferrers.  Much  more 
was  long  afterwards  devoted  to  the  foundation  and  enlargement  of 
the  great  house  of  Sion,  and  to  the  creation  of  Eton  and  of  King's 
College,  Cambridge.  But  these  would  have  absorbed  only  a  por- 
tion of  the  funds.  Of  course  Henry's  French  war  necessitated 
considerable  extraordinary  grants. 

It  was  durmg  the  reign  of  Henry  VI.  that  the  Crown  estate  was 
reduced  to  the  lowest  point.  No  doubt  the  costs  of  the  French 
\var  were  great,  and  the  acquisitions  which  were  made  in  France 
v^^ere  not  profitable.  But  other  causes  were  at  work  during  the 
young  king's  childhood,  though  his  reign  was  always  a  minority. 
Now  the  report  presented  to  Parliament,  when  the  king  was 
between  eleven  and  twelve  years  old,  on  October  18,  1433,  is  to  the 
effect  that  the  revenue  had  fallen  to  little  more  than  £9,000  a  year, 
exclusive  of  the  Duchy  of  Lancaster.  The  principal  items  of  expendi- 
ture were  the  household  at  Wmdsor,  £13,678  ;  annuities  to  the  mem- 


THE  ESTATE  UNDEB  THE  HOUSE  OF  LANCASTER.    419 

bers  of  the  royal  family,  £11,152  ;  the  government  of  the  Marches 
and  Ireland,  £10,899,  Calais,  £11,913.  The  total  charges  are  £56,878, 
or  £47,877  in  excess  of  the  income.  There  were  outstanding  debts 
to  the  amount  of  £164,815,  besides  liabilities  for  which  securities 
were  held.  Of  course  much  of  the  Crown  estate  was  permanently 
or  temporarily  alienated,  and  it  is  plain  that,  besides  the  cadets  of 
the  royal  house,  many  of  the  nobility  had  quartered  themselves  on 
the  revenue.  The  treasurer.  Lord  Cromwell,  who  died  some  years 
after,  perhaps  the  richest  subject  in  England,  had  no  doubt  assisted 
at  the  spoliation.     He  became  a  violent  Yorkist  before  his  death. 

There  can  be  no  doubt  that  this  wholesale  plunder  of  the  Crown 
estate,  and  the  resentments  of  those  who  were  excluded  from  the 
spoil,  developed  and  kept  alive  the  atrocious  feuds  of  the  fifteenth 
century.  The  civil  war,  which  lasted  for  over  thirty  years,  from 
the  skirmish  of  St.  Albans  to  the  battle  of  Bosworth,  was  essentially 
one  of  partisans.  The  people  took  little  part  in  it,  except  in  so  far 
as  the  Lollards  of  the  eastern  counties  preferred  the  Yorkist  to  the 
Lancastrian  faction ;  for  the  latter  was  the  persecuting  party,  while 
the  former  appears  to  have  been  tolerant.  But  nearly  all  the 
nobles,  except  perhaps  some  on  the  Scottish  border — where,  however, 
the  Percies  were  violently  Lancastrian — took  part  in  the  struggle. 

They  undoubtedly  obtained  their  partisans  from  those  soldiers 
of  fortune  whom  the  cessation  of  the  long  war  with  France  had 
sent  back  to  England.  And  they  seem  to  have  worn  each  other 
out,  for  at  Bosworth  the  forces  on  either  side  appear  to  have  been 
insignificant.  Now  the  proof  that  this  civil  war  did  not  affect  the 
mass  of  the  EngHsh  people  is  to  be  found  in  the  singularly  pro- 
gressive condition  of  England  during  the  fifteenth  century,  and  the 
total  absence  of  complaint  during  the  murderous  strife  that  was 
going  on  about  any  loss  or  disturbance  from  these  military  events. 
You  will  observe',  too,  that  the  war  of  succession  was  eminently  one 
of  pitched  battles,  not  of  sieges  ;  and  it  is  curious  that  during  the 
heat  of  the  struggle  the  strong  castellated  mansion  of  an  earlier 
date  gives  way  to  the  embattled  house,  which,  though  possessed  of 
some  plight  defences,  was  by  no  means  such  a  stronghold  as  the 
feudal  castle  was. 

The  war  of  the  family  succession  gives  occasion  to  those 
numerous  acts  of  attainder,  confiscation,  and  resumption,  which 


420  THE  ESTATE  OF  THE  GROWN. 

were  perhaps  intended  to  obviate  tlie  perpetual  inheritances  which 
had  been  created  under  entails  and  uses.  The  practice  of  employ- 
ing Parliament  as  the  means  by  which  malcontents  in  high  rank 
might  be  effectually  crushed,  began  with  the  Coventry  Parliament 
of  1459,  when  Margaret  resolved  on  the  wholesale  attainder  of  the 
entire  Yorkist  party.  This,  it  is  true,  did  not  take  effect ;  for  the 
acts  of  this  Parliament  were  revoked  in  the  following  year.  But 
the  precedent  was  not  forgotten.  It  was  repeated  in  1461,  after 
Edward's  accession  ;  and  in  1471,  after  he  had  finally  subdued  the 
Lancastrians  at  Barnet  and  Tewkesbury.  It  was  revived  after 
Bos  worth,  after  Henry  had  determined  to  assert  that  he  was 
de  jure  and  de  facto  king,  the  day  before  the  battle.  The  Crown 
frequently  extended  its  estate  from  this  time  forth  by  forfeitures. 

If  there  be  any  truth  whatever  in  the  common  statement  as  to 
the  real  estate  possessed  by  the  monasteries,  the  addition  made  to 
the  Crown  estate  by  the  Dissolution  was  enormous.  It  was  said  that 
Henry  entered  into  the  possession  of  one-third  the  area  of  England. 
It  is  certain  that  he  promised,  if  this  grant  were  made  him,  that  he 
would  ask  his  people  for  no  further  taxes.  It  is  equally  certain 
that  he  broke  his  word.  It  is  quite  as  certain  that  the  whole  of 
what  he  appropriated  disappeared  in  a  marvellously  short  time,  and 
that  before  he  died  he  was  reduced  to  the  greatest  straits,  and 
resorted  to  the  most  disgraceful  frauds  in  order  to  extricate  himself. 
It  has  been  said  that  the  monks  foresaw  the  storm,  granted  long 
leases,  and  invented  the  fine  on  beneficial  holdings ;  and  there  is 
historical  colour  for  this  allegation.  But  the  accumulated  treasures 
in  plate  and  jewels,  possessed  by  the  more  famous  and  frequented 
monasteries,  must  have  been  enormous ;  and  the  trials  of  abbots 
and  others  for  embezzling  the  monastic  treasure,  the  diligent 
search  made  by  the  king's  agents  for  it,  and  the  extreme  rarity  of 
any  discovery  in  later  times  of  a  hidden  hoard,  prove,  I  think,  that 
the  whole,  or  nearly  the  whole,  must  have  been  surrendered.  I  am 
of  course  aware  that  Henry  made  prodigious  grants.  The  houses 
of  the  Eeformation  owe  most  of  their  wealth  to  their  share  in  the 
plunder.  But  this  share  was  but  a  fraction.  Besides,  the  nobles 
whom  he  proscribed  and  ruined,  could  have  almost  afforded  suf- 
ficient provision  for  those  whom  he  created  and  left. 

After  this  epoch  the  hereditary  estate  of  the  Crown  was  greatly 


THE  TUDOB  PERIOD,  421 

wasted.  The  infancy  of  Edward  VI.  was  like  the  infancy  of 
Henry  VI.,  except  that  the  later  child-king  was  remarkably  pre- 
cocious. But  the  guardians  wasted  and  appropriated  much  that 
Henry  had  not  lived  long  enough  to  spend,  and  the  young  king's 
sisters — Mary  and  Elizabeth — were  both  exceedingly  poor.  Eliza- 
beth was  forced  to  supply  the  wants  of  the  few  courtiers  whom  she 
enriched  from  other  sources  than  those  of  the  Crown  lands  ;  and  it 
is  well  known  that  some  rich  bishoprics  were  turned  into  very  poor 
ones,  in  order  to  satisfy  the  claims  of  her  favourites.  Elizabeth 
insisted  on  the  government  of  the  Church  by  bishops,  but  she  had 
no  objection  to  compensating  their  spiritual  dignity  by  shortening 
their  temporal  resources.  It  is  a  more  disputable  question  whether 
she  intended,  or  hoped  to  compel,  an  ornate  ritual.  It  is  perfectly 
certain  that  it  was  not  enforced,  whatever  opinions  have  been 
recently  expressed  as  to  the  fact.  Had  it  been,  I  should  certainly 
have  been  able  to  trace  it  in  the  college  accounts. 

The  indirect  revenue  of  the  Crown  was  stationary  during  the 
reign  of  EHzabeth  ;  it  began  to  grow  rapidly  under  James.  That 
very  absurd  person  chafed  at  Parliament  most  unwisely ;  for  it  was 
the  means  by  which  discontent  evaporated  in  complaint.  In  the 
times  of  the  Plantagenets,  the  favour  shown  to  Carr  and  Villiers 
would  have  been  resented  as  effectually  as  that  exhibited  against 
Gaveston  and  the  Despensers.  But  Parliament  became  a  mouth- 
piece through  which  popular  indignation  found  a  vent.  James, 
however,  discovered  sources  of  revenue  which  his  predecessors  never 
dreamed  of.  Not  content  with  straining  the  feudal  rights  of  the 
Crown,  he  openly  sold  hereditary  honours,  instituting  a  new  order 
— entrance  to  which  was  purchasable  for  a  round  sum.  But,  in 
fact,  the  interest  which  was  anciently  felt  in  the  Crown  estate  was 
lessened  by  the  graver  question — which  was  not  set  at  rest  till 
civil  war  decided  it — the  right  of  the  Crown  to  revise  and  increase 
the  ancient  customs  which  it  had  collected  at  the  ports.  The 
strife,  which  begun  with  Cecil's  **  Book  of  Bates,"  was  only  ended 
at  the  Whitehall  tragedy.  James  appears,  from  the  transactions 
between  him  and  the  City  of  London,  to  have  died  greatly  in  debt. 
It  appears  that  the  Irish  estates  of  the  City  Companies  were  gradu- 
ally acquired,  and  that  some,  at  least,  of  them  were  taken  in  lieu  of 
advances  in  the  reign  of  Charles. 


422  THE  ESTATE  OF  TEE  CBOWN, 

During  the  time  in  which  he  had  quarrelled  with  Parliament, 
Charles  attempted  to  enlarge  the  estate  of  the  Crown  by  inquiring 
into  the  boundaries  of  the  royal  forests.  The  exemption  of  the 
Crown's  title  from  any  prescription  is  probably  a  very  early  maxim 
of  law.  It  certainly  found  favour  with  Charles,  who,  we  are  told, 
wished  to  govern  in  entire  accordance  with  law.  But  this  laudable 
aspiration  was,  in  the  eyes  of  his  contemporaries,  marred  by  his 
coercing  the  judges,  and  subjecting  juries  to  the  old  law  or  custom 
of  attaint.  I  am  not  sure  that  a  naked  despotism  is  not  better,  as 
I  am  sure  it  is  much  more  honest,  than  an  affectation  of  legality 
from  which  all  true  legality  is  carefully  weeded  out.  To  supersede 
law  is  a  manher  course  than  to  use  the  forms  of  law  as  a  cloak  for 
absolutism.  At  any  rate,  Charles  created  against  himself  a  party 
of  aggrieved  peers.  I  know  nothing  in  the  irony  of  history  more 
striking  than  the  fact  that  the  son  of  the  first  Lord  Salisbury  of 
the  house  of  Cecil  took  part,  as  he  virtually  did  by  sitting  among 
the  Lords  on  the  memorable  80th  of  January,  in  the  execution  of 
the  son  of  that  king,  whom  the  first  Lord  Salisbury  instigated  to 
quarrel  with  his  Parliament,  by  doing  what  that  Parliament  con- 
ceived to  be  illegal  and  constantly  resented. 

During  the  Protectorate  the  incidents  of  the  Crown  estate  were 
neglected,  or  silently  abrogated,  though  the  direct  taxation  levied  on 
all  landowners  was  searching  and  heavy.  The  estate  of  the  Crown 
became  the  estate  of  the  nation,  and  formed  part  of  the  general 
revenue.  Cromwell  had  a  modest  establishment  for  his  household 
at  Whitehall,  though  the  cost  of  protecting  his  Government  by  a 
standing  army  was  great.  At  the  Kestoration,  on  the  ridiculous 
and  technical  plea,  that  as  Cromwell  had  not  been  formally  declared 
king,  the  Act  of  Henry  VII.  did  not  protect  his  adherents,  or 
legalize  his  government,  all  the  Acts  of  eighteen  years  were  de- 
clared void  by  the  lawyers.  But  it  was  impossible  to  ignore  the 
custom  which  had  held  good  for  nearly  a  generation,  and  the  feudal 
dues  of  the  Crown  were  extinguished  at  the  cost  of  the  poorest  class 
of  people,  they  who  were  customers  or  consumers  of  articles  included 
under  the  hereditary  excise.  The  estate  of  the  Crown,  now  become 
a  comparatively  unimportant  part  of  the  royal  revenue,  was  left  to 
the  discretion  of  the  reigning  sovereign,  and  conceived  to  stand  on 
the  footing  of  a  private  estate.    It  is  not  remarkable  that  Charles 


THE  GBANTS  OF  CHARLES  II.  428 

gave  so  much  away,  the  wonder  is  that  he  left  any  part  of  it  for 
nimself  or  his  successor.  The  check  on  ahenation  was,  I  beheve, 
the  consciousness  that  if  he  left  himself  entirely  without  resources 
he  would  need  to  apply  to  Parhament,  and  it  is  plain  that  Charles  11. 
was  as  bent,  in  the  latter  years  of  his  life,  on  dispensing  with  Par- 
haments  as  his  father  had  been  before  him.  Fortunately  I  beheve, 
for  him,  the  project  was  fresh  when  his  sudden  death  occurred. 

Now  during  the  actual  reign  of  Charles,  which  lasted  for  near 
a  quarter  of  a  century,  the  estate  of  the  Crown  was  largely  burdened 
by  grants  to  his  numerous  irregular  offspring.  He  was  not  indif- 
ferent indeed  to  indirect  means  of  enriching  them.  The  eldest  lie 
married  to  the  heiress  of  the  Scotts,  Earls  of  Buccleuch  ;  another 
was  matched  with  the  heiress  of  the  De  Veres,  an  ancient  and 
impoverished  peerage ;  the  youngest  was  married  to  Charles's  own 
kinswoman,  the  heiress  of  the  Scottish  house  of  Richmond.  But 
all  were  provided  hberally  for  out  of  the  Crown  estate,  some  from 
what  were  conceived  to  be  the  hereditary  resources  of  the  Crown, 
some  from  doubtful  taxes  anciently  imposed,  but  imposed,  it  would 
appear,  with  insufficient  legality.  But  these  grants  in  later  times 
were  the  occasion  of  a  singular  controversy,  and  ultimately  of  a 
significant  Parliamentary  settlement,  in  which  very  ancient  tra- 
ditions as  to  the  permanent  alienability  of  the  Crown  estate  were 
affirmed,  and  under  strict  conditions  the  descent  of  the  estate  was 
protected.  There  is  not,  I  believe,  a  grant  of  James  II.  from  the 
Crown  estate,  for  Berwick  went  into  exile  with  his  father. 

Now  it  was  I  beheve  an  early  doctrine,  certainly  as  early  as  the 
fifteenth  century,  that  a  grant  of  khe  Crown,  even  when  the  sove- 
reign was  only  the  nominal  founder  or  donor,  was  valid  only 
during  the  hfe  of  the  donor,  or  reputed  founder,  and  could  in 
theory  be  revoked  on  the  demise  of  the  Crown.  Thus  Colleges  in 
Oxford  and  Cambridge,  even  though  they  were  founded  by  the 
Hcense  of  the  Crown,  sought  a.  confirmation  of  their  charters,  as 
though  such  charters  were  invalid  without  such  a  confirmation  from 
successive  sovereigns.  Magdalene  College,  for  instance,  in  this 
University,  obtained  a  fresh  charter,  and  at  no  little  cost,  from 
Henry  VIII.,  though  there  is  no  evidence  that  the  Crown  gave  an 
acre  of  land  to  the  foundation.  With  more  reason  the  foundation  of 
King's  College,  Cambridge,  had  to  pay  smart  money  to  Edward  IV., 


424  THE  ESTATE  OF  THE  CBOWN. 

and  to  redeem  the  legacy  of  Henry  VII.  devised  for  the  completion 
of  the  chapel  from  his  magnanimous  pon.  But  the  most  significant 
illustration  of  this  principle  is  to  be  found  in  the  various  acts  of 
resumption.  Here  it  was  considered  necessary  to  insert  the  colleges 
of  Oxford  and  Cambridge,  and  the  two  ancient  schools  of  Win- 
chester and  Eton,  among  the  exceptions  to  a  general  act.  A 
relic  of  this  doctrine  appears  in  the  history  of  the  judges'  patents. 
By  the  Act  of  Settlement  the  judges  are  irremovable,  except  by  an 
address  from  both  Houses  of  Parliament.  The  protection  is  perhaps 
excessive,  but  long  experience  had  taught  the  statesmen  of  the 
Revolution  that  these  people  could  not  be  kept  decently  honest  un- 
less they  had  a  freehold  given  them  in  their  offices.  In  our  day, 
perhaps,  the  privilege  is  too  absolute,  and  well-proved  partisanship, 
stupidity,  or  ignorance,  recognized  to  the  satisfaction  of  either 
house  and  affirmed,  might  be  conveniently  substituted  for  the  double 
address.  But  notwithstanding  the  Act  of  Settlement,  it  was  law, 
up  to  the  accession  of  George  JIL,  that  the  demise  of  the  Crown 
vacated  the  patents  of  the  judges. 

The  evidence  on  the  subject  referred  to  was  collected  at  the  very 
end  of  the  seventeenth  century  with  great  fulness  and  superficial 
moderation  by  Davenant,  in  his  discourse  on  grants  and  resump- 
tions. Davenant  was  a  very  capable  pamphleteer  and  partisan  writer 
in  a  time  when  a  pamphlet  could  influence  a  policy,  certainly  sustain 
it.  He  knew  well  enough  what  were  the  conditions  under  which 
party  writing  alone  could  be  successful,  for  during  the  Revolutionary 
time,  and  for  a  long  time  afterwards,  the  pamphlet  was  the  most 
serviceable  weapon  of  literary  warfare.  In  our  day,  the  opinions  of  a 
politician  expressed  in  writing  are  more  ephemeral  than  his  speeches. 
No  one  cares,  perhaps  no  one  rightly  cares,  what  was  said  yesterday 
in  a  leading  article.  No  one  cares,  and  probably  with  equal  justice, 
at  what  a  public  man  has  alleged  in  a  signed  article  or  pamphlet 
for  any  ^ong  time.  Even  the  trick  of  searching  into  Hansard 
or  the  files  of  a  newspaper  for  public  utterances  in  order  to 
found  charges  of  inconsistency  on  them  is  stale.  But  nearly 
two  centuries  ago  political  pamphlets  were  written  with  extreme 
care,  were  constantly  quoted,  and  not  infrequently  reprinted. 
They  often  deserve  to  be,  for  they  are  the  best  index  of  contem- 
porary opinion,  since  the  writer  had  to  catch  public  opinion  at  the 


DAVENANT  ON  BESUMPTI0N8.  425 

time  when  he  wrote,  and,  if  he  would  be  successful,  reflect  it  with 
fidelity.  Then  he  had  to  give  good  reasons,  historical,  for  matters 
in  which  he  appealed  to  ancient  precedent,  political  or  economical, 
when  he  had  to  deal  with  diplomatic  combinations,  when  he  advo- 
cated or  insinuated  a  line  of  policy  or  the  reversal  of  one.  Swift's 
**  Thoughts  on  the  Conduct  of  the  Allies"  did  not  bring  about  that 
Parliamentary  change  in  England  which  led  to  the  treaty  of  Utrecht, 
for  the  Tory  party  were  bent  on  ousting  the  Whigs  ;  but  it  was  the 
best  justification  of  their  tactics  that  could  be  given.  Davenant  did 
not  create  the  feeling  which  led  to  the  action  of  Parliament  in 
1700,  when  he  obliquely  and  inferentially  challenged  the  grants  of 
William  to  his  Dutch  favourites ;  but  he  brought  considerable  learn- 
ing into  the  controversy  on  the  question,  and  gave  the  air  of  a 
respectable  zeal  for  the  public  service  and  public  economy  in  a  • 
controversy  which  was  in  the  main  partisan,  though  the  indiscre- 
tion of  the  administration  had  given  a  powerful  lever  to  its 
enemies. 

Davenant  was  the  son  of  the  playwriter  whom  some  believed 
had  inherited  a  little  of  Shakspere's  genius  and  even  of  his  blood. 
He  filled  certain  places  in  the  ofiSce  of  the  revenue,  and  was  for 
a  time  in  Parliament.  He  was  essentially  a  party  writer  on  the  Tory 
side,  and  the  best  writer  which  they  had  in  the  seventeenth  century. 
To  our  habits  of  thought,  his  true  picture  of  a  modern  Whig  is  a 
gross  and  clumsy  lampoon,  but  it  was  highly  effective  at  the  time ; 
for  it  charged  the  politicians  of  that  party  with  no  better  aim  than 
that  of  pretending  to  public  spirit  as  a  cloak  for  personal  gains ; 
contrasted  them  to  their  disadvantage  with  the  Whigs  of  a  genera- 
tion or  two  before,  for  instance,  the  Exclusionists,  and  even  the 
framers  of  the  Kyehouse  plot,  and  suggested  their  proscription. 
It  was  most  extensively  circulated  by  the  Tory  leaders,  and  firmly 
believed  to  be  a  genuine  account  of  such  men  as  Somers,  Halifax, 
Burnet,  and  the  like.  So  highly  did  Louis  XIV.  value  this  timely 
lampoon,  that  he  sent  Davenant  a  handsome  present.  Davenant 
repaid  the  bribe  by  entering  into  confidential  communications  with 
Poussin,  the  French  envoy,  and  was  in  his  company  when  the 
famous  supper  of  the  Blue  Posts  was  being  enjoyed.  But  this 
event  was  subsequent  to  the  essay. 

The  essay  on  Resumptions  is  exceedingly  adroit.     It  dwells  on 


426  THE  ESTATE  OF  THE  CBOWN. 

the  importance  which  had  been  traditionally  assigned  to  the  Crown 
estate,  and  the  discontents,  insurrections,  and  resolutions  which  had 
been  caused  by  the  malversation  of  ministers  of  the  Crown,  their 
embezzlement  of  it  in  their  own  interests,  and  their  corrupt  com- 
plicity with  those  whom  the  king  had  unwisely  favoured.  He  dwells 
with  particular  emphasis  on  the  occasions  when  the  reigning 
monarch  had  quartered  foreign  favourites  on  the  Crown  estate,  and 
how  uniformly  the  community  had  resented  the  enriching  of  these 
adventurers.  He  alludes  to  the  fact  that  in  all  impeachments  of 
unpopular  and  corrupt  persons,  the  charge  that  they  had  enriched 
themselves  by  the  disherison  of  the  Crown,  and  to  the  waste  of  the 
royal  revenue,  had  been  strongly  insisted  on,  that  it  was  alleged  in 
the  case  of  Villiers,  of  Strafford,  whom  he  ingeniously  asserts  to  have 
been  the  victim  of  a  section  of  the  Court  party  who  would  screen 
themselves  by  sacrificing  him,  and  touches  on  Danby's  case,  a  public 
man  still  living,  and  one  of  his  own  party,  though  now  under  a 
cloud,  with  an  exceedingly  shrewd  air  of  candour.  To  the  partisans 
of  that  time  and  the  students  of  this  age  who  can  read  between  the 
lines,  the  oaths  of  the  servants  of  the  Crown,  quoted  at  length,  were 
intended  to  charge  Somers  and  others  with  corruption  and  perjury, 
while  the  cases  cited  are  made  to  resemble  as  nearly  as  possible 
those  of  Bentinck,  Ginkell,  Rouvigny,  and  Keppel.  Everything  is 
cleverly  insinuated,  nothing  is  actually  alleged.  Even  in  dealing 
witJb  the  Irish  forfeitures  it  is  hinted  that  these  ought,  as  the  Irish 
Protestants  and  the  English  public  have  found  the  funds  for  the 
Irish  campaign,  to  be  disposed  of  for  the  benefit  of  the  taxpayer, 
and  not  to  be  distributed  at  the  pleasure  of  the  Crown,  even  among 
the  most  deserving  persons.  Nothing  could  be  more  adroit  and  in 
terms  less  offensive  than  Davenant's  volume,  for  it  amounted  to  these 
dimensions,  and  nothing  more  serviceable  to  the  malcontents.  It 
does  not  seem  to  me  that  Macaulay  has  given  sufficient  weight  to 
this  remarkable  essay.  But  he  was  dealing  with  this  subject  and 
this  epoch  just  at  the  time  when  fatal  illness  attacked  him.  I  will 
assume  that  you  are  familiar  with  the  description  which  this 
luminous  and  conscientious  historian  gives  of  the  Parliamentary 

struggle  over  the  Irish  forfeitures  and  the  English  grants  in  the 

wenty-fifth  chapter  of  his  history. 
In  deahng  with  the  subject  of  the  Crown  estates  and  WilHam's 


THE  ACTION  OF  WILLIAM  III,  427 

grants,  Macaulay  utters  some  faint  censure  on  his  hero.  Now  I  do 
not  think  that  m  estimating  Wilham  III.  this  eminent  historian 
has  sufficiently  recognized  the  position  which  Wilham  had  occupied 
as  Prince  of  Orange,  and  that  which  the  Revolution  put  him  in  as 
king  of  England.  In  Holland  William  was  the  leader  of  a  faction 
against  which  was  arrayed  not  a  little  of  the  administrative  abihty 
of  the  Dutch  nation,  and  nearly  all  its  wealth.  It  was  the  mis- 
fortmie  of  the  house  of  Orange  that  two  of  its  most  eminent  repre- 
sentatives had  been  strengthened  or  elevated  to  power  by  the  judicial 
murder  or  assassination  of  their  best  friends  and  benefactors. 
Maurice,  who  in  his  own  youth  owed  everything  to  the  care  and  energy 
of  Bameveldt,  brought  about  or  permitted  the  atrocious  execution  of 
that  great  man;  and  WiUiam  III.,  who  owed  everything  in  his  own 
youth  to  the  fostering  care  of  the  De  Witts,  was  thrust  to  the  head 
of  affairs  after  the  assassination  of  the  brothers,  who  had  been 
deceived  by  the  matchless  perfidy  of  William's  uncle.  Now  the 
De  Witts  were  especially  the  type  of  the  great  Amsterdam  merchants, 
jurists,  and  publicists,  and  though  the  eminent  services  of  William 
to  his  country  for  the  sixteen  years  between  1672  and  1688  effaced, 
to  some  extent,  the  memory  of  the  events  which  caused  his  rise, 
and  his  association  with  the  Dutch  democracy,  William  was  never 
at  home  at  Amsterdam.  But  in  England  the  case  was  wholly  dif- 
ferent. He  had  risen  to  power,  and  to  the  place  of  an  English 
king,  by  the  class  which  had  been  opposed  to  him  in  Holland,  the 
mercantile  mterests  of  the  great  trading  cities.  He  had  been  found 
exceedingly  useful  by  that  part  of  tlie  aristocracy  which  had  broken 
with  James.  But  the  country  clergy  and  the  country  gentlemen  were 
never  reconciled  to  him,  never  really  rallied  to  him.  He  entertained 
towards  the  two  parties  of  the  Revolution  about  as  much  respect 
as  he  had  entertained  towards  the  burgesses  of  Amsterdam,  and 
they,  in  so  far  as  they  had  escaped  from  the  corruptions  of  the 
Restoration,  a  rare  occurrence  in  any  of  the  public  men,  could  not 
be  expected  to  feel  personal  loyalty  to  a  foreigner,  a  Dutchman, 
a  king,  who,  as  they  conceived,  apart  from  his  attachment  to 
certain  persons  of  his  own  nation,  was  certain  to  postpone  English 
to  Dutch  interests. 

Now  Macaulay  says  that  "  in  giving  away  the  old  domains  of  the 
Crown  he  did  only  what  he  had  a  right  to  do,  and  what  all  his 


428  THE  ESTATE  OF  THE  CBOWN. 

predecessors  had  done."  But  this  was  the  whole  question.  It  was 
alleged  by  Davenant,  and  alleged  with  historical  truth,  that  it  was 
not  in  the  power  of  the  Crown  to  grant  more  than  a  life  interest  in 
any  part  of  the  Crown  estate,  and  the  precedents  for  this  construc- 
tion of  the  law  were  numerous  and  cogent.  The  Rolls  of  Parha- 
ment,  the  journals  of  the  two  Houses,  the  Statute  Book  itself, 
looked  on  at  that  time,  when  precedents  were  of  the  greatest  sig- 
nificance, were  conclusive  on  the  subject.  Of  course  the  occasion 
of  the  stormiest  scenes,  as  Macaulay  has  shown,  was  not  the  favour 
shown  to  Somers  and  Burnet — in  the  former  of  which  it  might  be 
contended  with  some  reason  that  the  Chancellor  had  been  privy  to 
a  transaction  which  involved  his  own  benefit ;  and  the  attack  on 
this  failed,  even  the  malcontent  Whig  House  declining  to  join  in 
the  attack.  The  services  of  Ginkell,  Eouvigny,  and  Schomberg, 
the  grants  to  the  last  of  these  being  still  a  charge  on  the  exchequer, 
were  military,  intelligible,  and  important ;  the  grants  to  Bentinck 
and  Keppel,  to  the  former  outrageously  large,  were  made  to  needy 
Putch  nobles  who  had  attached  themselves  to  William,  and  were 
at  best  for  diplomatic  services,  but  mainly  for  personal  reasons. 
Whatever  were  the  merits  of  Bentinck,  however  justly  he  deserved 
William's  confidence,  English  people  saw  at  that  time  in  him  only 
an  arrogant  foreigner  who,  by  the  favour  of  the  king,  was  suddenly 
raised  to  be  the  equal  in  wealth  of  the  first  English  families,  and  this 
out  of  an  estate  the  deficiencies  of  which  would  have  to  be  supplied 
by  a  land  tax  on  the  country  gentry  and  by  excises  on  the  expenditure 
of  the  poor,  or  on  the  development  of  trade.  I  may  be  wrong,  but  I 
believe  that,  even  in  our  own  day,  the  ennobling  and  enrichment 
of  a  personal  favourite  of  the  reigning  sovereign  out  of  any  public 
fund  whatever,  say  the  duchies  of  Lancaster  and  Cornwall,  would 
be  met  by  an  equally  strong  opposition,  and  that  Parliament  would 
not  need  the  precedent  of  1700  in  order  to  give  effect  to  its  dis- 
content. I  cannot  but  think  that  but  little  of  the  sagacity  which 
William  possessed  was  needed  in  order  to  have  enabled  him  to 
foresee  the  dissatisfaction  which  would  be  aroused  by  his  grants  to 
Bentinck. 

Besides  it  might  have  been  argued  with  great  propriety  that  the 
relations  of  the  Crown  and  the  revenue  had  been  totally  altered  by 
the  Revolution.     This  great  change  had  been  eflected,  not  only  to 


WILLIAM'S  WANT  OF  JUDGMENT.  429 

reverse  the  doctrines  which  had  prevailed  or  had  been  taught,  as  to 
the  administrative  and  judicial  usurpations  of  the  Crown,  but  at 
once  and  for  ever  to  put  a  stop  to  equally  noxious  fiscal  theories. 
The  money,  the  revenues,  the  resources  of  the  country,  however 
ancient  they  were,  however  much  they  had  hitherto  been  at  the 
disposition  of  the  sovereign,  were  henceforward  to  be  under  the 
control  of  Parliament.  If,  it  was  argued,  the  hereditary  revenues 
of  the  Crown  were  wasted  prodigally  and  on  unworthy  objects,  the 
nation  has  to  make  the  loss  good.  Now  the  English  people  has 
never  failed  to  assist  the  necessities  of  the  Crown,  and  it  has  never 
failed  either  to  control  a  foreigner's  greed  when  he  has  quartered 
himself,  in  appearance  on  the  sovereign's  favour,  in  reality  on  the 
public  purse.  And  no  one  throughout  his  reign  more  misconceived 
the  new  departure  than  William  did.  He  thought  himself  entitled 
to  all  the  grants  which  a  packed  Parliament  had  made  to  James. 
He  thought  himself  at  liberty  to  appropriate  the  revenue  to  private 
purposes  more  largely  than  Charles,  to  the  discontent  even  of  those 
who  hated  the  memory  of  Cromwell.  Even  in  the  age  of  un- 
reasoning loyalty  they  had  endorsed  the  impeachments  of  Claren- 
don and  Danby,  and  included  peculation  in  the  charges  made 
against  both. 

Again  it  was  not  to  the  credit  of  the  king  and  his  administration 
that  no  steps  had  been  taken  after  those  years  of  peace  to  deal  with 
the  deficits  and  the  floating  debts  of  the  war.  The  people,  the 
Parliament  itself  did  not  know  what  were  the  charges  against  which 
they  had  to  make  a  permanent  provision,  and  ignorance  naturally 
exaggerated  liabilities.  If  the  Irish  forfeitures  could  lighten  this 
load  of  debt,  it  was  not  unreasonable  for  people,  smarting  under 
novel  taxes,  irritated  at  a  great  direct  tax  on  land,  to  claim  for  itself 
the  repayment  of  those  funds,  the  advance  of  which  had  made  the 
Irish  conquest  alone  possible.  It  should  have  been  the  business  of 
the  admmistration  to  exhibit  in  a  distinct  and  clear  schedule  what 
the  liabilities  of  the  nation  were,  and  to  take  order  for  their  liquida- 
tion or  funding.  Even  now,  it  is  exceedingly  difficult  to  make  out 
from  returns  presented  to  Parliament,  what  was  the  cost  of  the  war 
of  the  English  succession  which  ended  with  the  peace  of  Kyswick, 
even  from  Postlethwayte's  details. 

At  the  beginning  of  Anne's  reign  (it  should  be  noticed  that  no 


430  THE  ESTATE  OF  THE  CBOWN, 

such  steps  were  taken  in  William's  as  a  proof  that  the  English 
Parliament  was  generous,  perhaps  just),  a  restraint  was  put  by 
Parliament  on  alienations  of  the  estate  of  the  Crown,  by  what  must 
be  now  recognized  as  the  administration.  By  1  Anne  cap.  6,  the 
Crown  was  disabled  from  granting  leases  of  Crown  lands  for  more 
than  thirty-one  years,  and  no  renewal  of  the  lease  was  allowed  till 
the  earlier  had  determined.  Again,  it  could  not  make  grants  from 
the  hereditary  revenues  of  the  Crown  for  a  longer  period  than  the 
life  of  the  sovereign.  This  is  illustrated  by  the  case  of  Churchill, 
whom  Anne  made  Duke  of  Marlborough  at  the  instant  of  her 
accession,  and  on  .whom  she  at  once  settled  for  her  life  £5,000  a^ 
year  out  of  the  profits  of  the  Post  Office.  When  Parliament  met  in 
October,  and  Marlborough  had  been  appointed  commander-in-chief 
of  the  Dutch  as  well  as  of  the  English  forces,  and  had  captured 
some  places  in  Flanders,  though  he  had  not  as  yet  shown  eminent 
proofs  of  his  great  military  abilities,  the  queen,  no  doubt  at  the 
instigation  of  the  duchess,  sent  a  message  to  the  Commons  re- 
questing them  to  settle  £5,000  a  year  on  the  duke  for  his  services 
in  Flanders.  The  Commons  admitted  that  he  had  retrieved  the 
honour  of  the  English  nation,  declining  to  accept  the  words 
"  mamtained  or  advanced."  But  they  refused  to  make  the  grant  and 
annex  it  permanently  to  his  peerage,  on  the  ground  that  **  the 
revenue  of  the  Crown  had  been  so  much  reduced  by  exorbitant 
grants  in  the  late  reign,''  and  carried  these  words,  reflecting  on 
WiUiam's  action,  by  an  overwhelming  majority. 

By  this  time,  indeed,  the  estate  of  the  Crown  had  sunk  to  the 
shadow  of  its  ancient  dimensions.  Lessened  as  it  had  been  in  the 
early  part  of  the  fifteenth  century  to  some  £57,000  a  year,  and 
therefore  the  subject  of  anxious  alarm  to  the  Commons,  who 
demanded  that  a  resumption  of  grants  should  forthwith  take  place, 
it  was  still  on  a  fair  interpretation  of  rents  paid  in  the  fifteenth 
century,  equal  to  two  and  a  quarter  millions  of  present  revenue,  for 
forty  is  a  moderate  multiplier  of  mediaeval  rents  into  modern  money. 
I  have  no  estimate  of  the  annual  value  of  the  Crown  lands  at  the 
beginning  of  the  eighteenth  century,  but  1  have  no  doubt  from  the 
general  rise  of  rents,  between  the  restricting  statute  of  1  Amie, 
that  it  was  not  more  than  £40,000  a  year  by  that  time,  and  rents 
having  risen  about  ten  times  since  that  date,  the  present  value  of 


THE  ACT  OF  ANNE.     THE  PBESENT  ESTATE.        431 

the  Crown  estate  confirms  this  calculation.  Of  course  it  had 
become  wholly  insufficient  for  the  maintenance  of  those  objects 
to  which  it  had  been  originally  dedicated,  and  even  for  the  royal 
household,  which  thenceforward  depended  on  a  civil  list,  voted  and 
appropriated  at  the  commencement  of  each  reign. 

Practically,  the  estate  of  the  Crown  has  become  part  of  the 
national  estate.  It  does  not  belong  to  the  present  royal  family  by 
descent,  for  on  mere  grounds  of  hereditary  right,  there  are  many 
persons  more  near  the  Stuart  stock  than  that  which  was  declared 
after  the  death  of  the  Duke  of  Gloucester,  by  Act  of  Parhament,  to 
be  next  in  succession.  The  doctrine  that  the  Crown  lands  belong 
to  the  Crown  is  as  obsolete  as  the  doctrine  would  be  that  the 
hereditary  excise  of  the  Eestoration  does.  These  lands  have  been 
surrendered,  or  rather  have  never  been  given,  and  the  estate  is 
managed  by  and  for  the  State,  under  the  control  of  Parhament. 
Even  in  their  present  form  they  cannot  be  charged  or  ahenated, 
although  it  must  be  allowed,  the  restraint  was  put  on  when  there 
was  little  left  to  save,  just  as  in  EHzabeth's  reign,  the  disabling 
statute,  putting  a  check  to  the  alienation  of  lands  belonging  to 
ecclesiastical  and  academical  corporations  was  not  enacted  till 
many  sees  had  been  greatly  impoverished  by  the  exactions  of 
Elizabeth's  courtiers,  and  with  the  queen's  connivance. 

The  Act  restraining  the  Crown  from  alienating  the  royal  estate 
in  Engiand  did  not  extend  to  Ireland,  and  enormous  grants  of  these 
forfeited  estates,  about  which  so  much  stir  was  made  in  William's 
reign,  were  conferred  on  the  queen's  favourites,  notably  on  the 
Seymour  Conways.  But,  in  fact,  the  Irish  exchequer,  even  up  to  the 
days  of  the  Union,  was  loaded  with  placemen,  rewarded  for  services 
which,  even  in  Walpole's  time,  the  English  Parliament  would  have 
compensated  very  differently.  Perhaps  among  the  many  Irish 
grievances  which  existed  before  and  after  1782,  none  was  more 
offensive  to  national  feeling  than  the  use  which  was  made  of  the 
Irish  pension  hst,  and  the  lavish  expenditure  of  Irish  money  on 
those  who  were  fortunate  enough  to  get  a  share  in  the  distribution. 
Nearly  as  many  families  were  founded  and  enriched  from  this  source 
as  from  the  Church  lands  in  the  days  of  Henry,  and  even  the  Irish 
Parliament  which  is  associated  with  Grattan's  name,  contained 
persons  in  it,  created  under  this  system,  who  would  not  have  been 


432  THE  ESTATE  OF  THE  CBOWN, 

endured  in  the  very  worst  times  of  English  Parliamentary  corrup- 
tion; men  who  merited  the  indignant  contempt  with  which  Wolfe 
Tone  characterized  the  Irish  House  of  Commons. 

Two  of  the  ancient  Crown  estates  are  still  annexed  to  the 
reigning  monarch  and  the  heir  apparent,  the  ducbies  of  Lancaster 
and  Cornwall.  They  are  curious  survivals  of  the  old  feudal 
tenures,  and  illustrate  how  strangely  the  possessions  of  the  ancient 
estates  were  scattered  all  over  the  country,  for  the  two  duchies  hold 
lands  in  most  of  the  English  counties.  For  example,  there  is  a 
considerable  estate  of  the  Duchy  of  Cornwall  in  Berkshire,  not  half 
a  dozen  miles  from  Oxford.  Up  to  recently  those  estates  were 
generally  occupied  under  the  system  of  beneficial  leases,  but  these 
leases  have  not  been  renewed,  and  in  consequence  no  little  discon- 
tent has  been  expressed  by  those  who  had  purchased  on  the 
understanding  that  the  traditional  custom  would  be  continued. 
But  in  fact,  as  these  estates  are  appropriated  to  these  royal  persons, 
they  are  naturally,  in  their  improved  condition,  to  be  taken  into 
account  in  the  settlement  of  the  civil  list,  and  so  fulfil  to  some 
extent  the  purposes  for  which  in  old  times  the  estate  of  the  Crown 
was  so  suspiciously  watched. 

I  have  dealt  with  this  subject  then,  partly  because  it  plays  in 
past  history  so  important  a  part  in  that  economic  side  of  English 
pubhc  life  which  deals  with  taxation  and  revenue.  Its  indirect 
significance  in  the  many  disturbances  and  changes  which  have 
occurred  in  the  English  monarchy  is  of  the  greatest.  As  I  said 
at  first,  revolutions  in  English  history,  the  deposition  of  princes, 
the  change  in  the  succession,  the  control  of  Parliament  over  the 
executive,  may  have  been  brought  about  by  a  plurality  of  causes, 
but  the  fiscal  or  economic  cause  dominates  the  whole.  In  one  way 
the  shrunken  importance  of  the  Crown  estate,  now  not  as  much  as 
the  two-hundredth  part  of  the  annual  revenue,  has  made  the  succes- 
sion infinitely  stronger.  It  is  now  exactly  two  centuries  since 
Parliament  undertook  to  change  the  succession  to  the  Crown,  aud 
to  dissociate  itself  from  the  dogma  of  Divine  or  even  of  hereditary 
right.  You  will  not  find  any  two  centuries  of  English  history  in 
which  the  position  of  the  dynasty  which  Parliament  establisbed 
has  been  so  unassailed  as  that  of  the  House  of  Hanover.  The 
constantly  recurrent  cause  of  disaffection  Las  been  taken  away. 


THE  ANCIENT  INTEREST  OBSOLETE,  433 

The  personality  of  the  sovereign,  though  by  no  means  lost,  is 
merged  in  that  of  Parliament. 

The  appropriation  of  the  Crown  lands  by  Parliament,  and  the 
limitations  imposed  by  the  statute  of  Anne,  had  much  to  do  with 
the  gradual  extinction  of  Parliamentary  corruption.  People  may, 
if  they  please,  criticize  the  conduct  of  the  House  of  Commons,  its 
management  of  business,  its  appetite  for  undertakings  which  it 
cannot  adequately  deal  with,  its  delays,  its  disturbances,  its  fac- 
tions. But  no  critic  can  charge  it;  with  being  corrupt,  with  its 
members  being  influenced  by  personal  advantage  in  their  pohtical 
action,  with  any  motive  more  ignoble  than  ambition.  In  this  it 
can  be  contrasted  to  its  honour  with  every  other  Parliament,  with 
every  other  British  institution,  even  with  the  University  of  Oxford. 
In  this  political  purity  lies  its  enduring  hold  on  the  English  people. 
This  reputation  had  its  beginnings  in  the  efforts  of  those  who 
quarrelled,  however  unskilfully  and  unduly,  with  William,  and 
anticipated  by  its  own  action,  in  the  Act  of  Anne,  the  possible 
continuance  of  William's  errors  under  the  rule  of  his  feeble 
successor.  But  the  historical  interest  in  the  doctrine  of  resump- 
tions is  materially  modified,  if  not  extinguished,  by  the  passing  of 
the  Nullum  Tempus  Act  in  1768  (9  George  III.  cap.  16).  By  this 
Act,  the  Crown  was  disabled  from  resuming  any  grant  after  a  lapse 
of  sixty  years.  The  occasion  of  the  Act  was  an  attempt,  on  the  part 
of  Sir  John  Lowther,  to  appropriate  to  himself  through  the  interest 
of  his  father-in-law.  Lord  Bute,  one  of  the  grants  which  WiUiam 
ILL  had  made  to  Bentinck. 


XX. 

PUBLIC  DEBTS. 

Early  loans — The  example  of  the  Dutch — Their  finance — The  origin 
of  their  loans — The  power  which  a  governme7it  possesses  of  raising 
loans — The  United  States — France — India  and  the  Colonies — 
Elements  of  safety  and  distrust — Loans  in  government  paper — 
Inconvertible  paper — Taxation  of  dividends — The  ordinary  object 
of  loans — Permanent  and  terminable  loans — The  loans  of  the 
Bevolution — The  system  of  borrowing — The  funding  system,  and 
the  arguments  for  and  against  it — The  return  to  cash  payments, 
and  the  reasoning  of  those  who  wished  to  degrade  the  currency — 
FeeVs  action. 

The  Dutch  taught  European  governments  that  part  of  finance 
which  under  the  name  of  public  debts  pledges  the  future  earnings 
of  a  people  to  the  payment  of  interest  on  loans,  and  to  the  repay- 
ment of  them  in  course  of  time.  Governments  have  often  bor- 
rowed money  on  the  security  of  taxes.  Thus  our  Edward  III. 
raised  large  loans  from  Florentine  bankers,  giving  them  what  they 
no  doubt  thought  adequate  security,  and  broke  faith  with  them. 
It  is  not  so  long  ago  that  the  descendant  and  representative  of  one 
of  these  houses  was  entertained  in  London,  when  he  alluded  to  the 
fact,  though  without  any  expression  of  hope  that  the  liability 
written  off  five  centuries  ago  as  a  bad  debt  would  be  recognized  by 
the  present  generation.  I  mention  the  fact  to  illustrate  how  en- 
during is  the  memory  of  repudiation.  In  the  same  way  Philip  II. 
repudiated  his  debts  in  1596,  and  nearly  ruined  Genoa,  which  had 
plentifully  discounted  his  paper.  From  that  time  the  Government 
of  Spain  has  never  been  able  to  retrieve  its  credit.     Public  credit  is 


THE  EXAMPLE  OF  THE  DUTCH  485 

vigorous  enough  when  the  integrity  of  a  government  has  been 
traditionally  unblemished.  But  it  takes  a  long  time  to  restore  a 
tarnished  reputation  in  matters  of  finance,  when  the  confidence 
has  been  that  of  a  foreign  creditor  whose  most  effectual  criticism 
of  the  past  is  a  deaf  ear  to  present  applications.  I  shall  try  in  the 
course  of  this  lecture  to  point  out,  not  only  the  acts  which  destroy 
all  trust,  they  are  fairly  obvious,  but  also  the  circumstances  which 
excite  a  hardly  less  dangerous  suspicion. 

The  war  of  Dutch  independence  is,  to  my  mind,  the  most 
striking  fact  in  modern  European  history,  perhaps  in  the  history  of 
civiUzation.  It  begios  with  the  capture  of  Brill  by  the  Beggars  of 
the  Sea  on  April  1,  1572,  and  ends  with  the  practical  acknowledg- 
ment of  Dutch  Independence  in  1609.  It  is  true  that  before  this 
time  William  of  Orange  was  resisting  and  negotiating,  and  no  one 
doubts  how  important  was  his  name  as  a  rallying  cry,  and  his  counsel 
in  success  or  in  adversity.  But  the  War  of  Independence  was  essen- 
tially one  of  the  traders  and  the  people.  The  Dutch  nobility  were  con- 
stantly traitors  to  the  cause  which  they  had  embraced,  and  to  the 
men  who  trusted,  honoured,  and  rewarded  them.  It  was  unhappily 
the  case  that  two  of  the  English  commanders,  Yorke  and  Stanley, 
were  even  more  treacherous.  It  is  only  too  true  that  the  house  of 
Orange  has  exhibited  the  most  conspicuous  illustration  of  how  little 
hereditary  political  virtue,  poHtical  intelligence,  and  true  patriotism 
are.  This  house  in  its  later  times  has  clung  only  to  the  worst 
traits  which  disfigured  some  of  the  earlier  members  in  the  lineage. 
But  during  the  whole  struggle  the  Dutch  merchant  and  the  Dutch 
peasant  were  as  true  as  steel,  never  discouraged,  though  constantly 
deceived. 

The  debt  which  modem  civilization  owes  to  the  Dutch  cannot  be 
too  overrated.  They  taught  Europe  the  art  of  agriculture ;  for  it  is 
to  their  example  that  the  new  agriculture,  which  we  adopted  tardily 
in  the  eighteenth  century,  was  due.  They  instructed  Europe  in 
the  mystery  of  commercial  credit,  and  the  Bank  of  Amsterdam 
supplied  what  were  virtually  the  earliest  practical  lessons  in  mer- 
cantile finance.  They  taught  the  world  the  whole  of  the  scient'fic 
navigation  which  it  knew  for  centuries.  They  were  the  pioneers  of 
international  law,  of  physics,  of  mechanical  science,  of  a  rational 
medicine,  of  scholarship,  of  jurisprudence.     The  geograpliical  dis- 


486  PUBLIC  DEBTS. 

cover ies  of  Holland  were  the  basis  of  the  first  real  maps.  But  above 
all  things,  they  instructed  during  their  long  struggle  after  inde- 
pendence modern  financiers  in  the  art  of  taxation,  for  the  exigencies 
of  their  position  forced  them  to  try  every  expedient  for  the  discovery 
of  ways  and  means  by  which  the  little  republic  could  make  head 
against  the  colossal  armies  and,  as  was  believed,  the  inexhaustible 
wealth  of  Spain. 

The  Dutch  did  not  borrow  till  they  had  exhausted  every  other 
financial  expedient.  During  the  continuance  of  the  Dutch  excise, 
and  after  it  was  made  permanent,  in  order  to  secure  interest  on  the 
loans  which  the  Eepublic  found  it  necessary  to  raise,  every  Hollander, 
from  the  cradle  to  the  grave,  for  every  act  of  his  daily  life,  and 
even  for  the  voluntary  and  involuntary  incidents  of  it,  was  taxed. 
He  lived  under  the  regime  of  a  perpetual,  sleepless,  searching  octroi. 
No  nation  ever  bore  so  much  in  the  way  of  taxation  without  flinching. 
They  had  none  of  those  foolish  notions  which  possess  the  minds  of 
many  modern  financiers,  that  a  government  can  put  on  customs 
duties  and  make  foreigners  pay  them.  They  were  perfectly  aware 
that  trade  to  be  successful  must  be  free,  that  however  much  the 
Hollander  might  be  pinched  in  his  daily  expenditure,  thrift  might 
overcome  this  evil ;  but  that  to  deter  the  trader  from  bringing  pro- 
duce to  Dutch  ports  was  to  cripple  the  very  life  of  a  commercial 
people,  and  make  existence  impossible.  And  so  Dutch  finance  was 
a  charge  on  consumption,  levied  at  the  purchase  of  the  article,  or 
on  the  event  at  which  the  impost  was  due,  an  income  tax  which 
dealt  with  all  expenditure  at  the  time  in  which  expense  was  in- 
curred. But  trade  was  free,  and  Amsterdam  with  other  cities  were 
marts  from  which  all  European  merchants  took  their  price,  at 
which  all  traders  congregated.  Nothing  but  a  political  education 
of  the  most  stringent  kind,  a  deference  to  authority  which  never 
was  shown  to  power,  would  have  induced  this  extraordinary  people 
to  submit  to  so  searching  a  fiscal  inquisition,  and  yet  to  remain  so 
free  from  protectionist  illusions.  Their  finance  formed  a  precedent, 
but  never  became  an  example  for  other  communities,  perhaps 
because  no  other  community  has  been  animated  by  so  intelligent  a 
patriotism  at  that  which  marked  the  War  of  Dutch  Independence. 
Cromwell  imagined  that  he  could  graft  the  system  on  English 
finance.     But  notwithstanding  the  brilliancy  of  that  great  general's 


DUTCH  FINANCE  AND  LOANS.  4ffr 

career,  his  action,  and  that  of  those  who  were  with  him,  was  too 
narrow.  The  English  people  took  no  side  in  either  the  first  or  the 
second  English  Revolution.  They  had  been  carefully  excluded 
from  all  stake  in  the  struggle.  To  them  a  change  of  dynasty  was 
only  an  exchange  of  masters.  Even  now  it  may  be  well  doubted 
whether  many  Englishmen  rightly  interpret  the  meaning  of  political 
struggles. 

When  the  endurance  of  the  Dutch  taxpayers  of  excise  was 
apparently  exhausted,  the  Dutch  Government  took  to  borrowing  of 
their  more  wealthy  citizens,  for  there  was  no  reason  to  believe 
that  they  could  go  out  of  Holland  for  money.  If  they  had  had 
recourse  to  a  forced  loan,  as  a  special- income-tax  from  the  wealthy, 
and  the  expedient  had  been  successful,  the  money  could  have  been 
raised  and  spent.  But  the  Dutch  knew  that  capital  may  be  weak, 
but  that  it  is  very  mobile,  very  agile,  and  that  it  is  better  to  attract 
capital  than  to  discourage  it.  When  a  government  borrows  money 
from  its  own  subjects  or  citizens,  it  is  plain  that  it  could  extort  the 
money,  for  the  success  of  the  operation  proves  that  what  it  is  in 
quest  of  is  present.  But  entirely  apart  from  the  equity  of  such  an 
expedient,  it  is  wise  to  examine  its  policy.  Now  every  council- 
general  of  the  Dutch  states  who  had  any  sense,  knew  that  it  would 
be  impolitic  to  do  so,  and  the  Dutch  councils-general  were  very  well 
acquainted  with  the  conditions  of  business.  It  is  very  probable  that 
many  among  them  knew  that  to  borrow  on  the  future  industry  of 
the  community  is  to  incur  a  double  burden,  to  diminish  the  present 
material  of  industry  by  devoting  capital  to  an  object  which  would 
not  increase  the  industrial  powers  of  the  community,  and  by  forcing 
those  industrial  powers  to  pay  interest  on  a  loan  which  it  would 
take  the  future  industrial  powers  of  the  community  to  pay  off.  But 
they  borrowed  from  their  own  people,  and  the  rate  at  which  they 
borrowed  proved  how  considerable  were  the  resources  to  which 
they  appealed,  and  how  judicious  was  the  conclusion  at  which  they 
arrived. 

Assuming  an  intelligible  necessity,  a  government  has  almost 
indefinite  powers  of  borrowing  from  its  own  people,  under  the  con- 
ditions that  the  habit  of  saving  is  in  excess  of  the  habit  of  expendi- 
ture among  them,  and  that  the  community  has  a  reasonable  freedom 
of  industry  accorded  it.    Lord  Rothschild  once  told  me  that  the 


488  PUBLIC  DEBTS. 

reason  why  the  Jews  were  the  financiers  or  loan-mongers  of  Europe 
resided  in  the  fact  that  the  whole  race  saved,  every  one  of  them 
striving  to  accumulate  half  his  income.  M.  Sylvain  van  der  Weyer, 
the  Belgian  minister  from  the  date  of  the  Belgian  separation  to  his 
death,  told  me  that  this  was  the  secret  of  Belgian  wealth,  and  the 
cause  of  Belgian  agriculture,  which  should  almost  be  called  horti- 
culture. Every  Belgian,  he  said,  Irom  the  Duke  of  Arenberg  to  the 
peasant,  tries  to  save  half  his  income.  Now,  such  a  people  must 
either  hoard  and  hide  its  savings,  a  custom  nearly  obsolete ;  or  buy 
land  with  them,  a  practice  said  to  bold  in  Belgium  and  rural  France  ; 
or  employ  them  under  the  joint-stock  principle,  in  industrial  under- 
takings, as  is  witnessed  in  many  countries  ;  or  lend  them  to  govern- 
ment. They  may,  in  the  last  form,  be  lent  to  government  for 
reproductive  purposes,  as  in  railways  or  similarly  remunerative 
nndertakings ;  or  for  objects  remotely  remunerative,  as  in  defences, 
harbours,  and  the  like;  or  in  war,  when  whatever  may  be  the 
pretext,  or  justification,  they  are  for  all  that  concerns  future 
industry  wasted,  and  remain  a  burden. 

The  power,  then,  which  a  government  has  of  borrowing  from  its 
own  people,  however  seriously  the  operation  may  cripple  industry, 
is  indefinite,  under  the  above  conditions.  But  a  government  may 
find  it  difficult  or  impossible  to  borrow  from  its  own  subjects  or 
citizens.  They  may  be  too  poor  to  lend  voluntarily,  as  is  the  case 
with  Kussia ;  or  they  may  be  distrustful  of  the  government,  as  in 
British  India ;  or  they  can  better  afford  to  borrow  abroad,  because 
they  can  find  a  more  lucrative  employment  for  their  savings  at 
home,  as  in  the  British  colonies.  In  these  cases,  the  loan  is  held 
out  of  the  country.  Now,  though  it  is  not  easy  to  say  where  the 
limit  of  possible  indebtedness  in  such  cases  is  to  be  found,  it  is 
certainly  far  narrower  than  it  is  when  the  government  borrows  of 
its  own  subjects.  The  Russian  government,  since  it  came  before 
the  European  Stock  Exchange,  has  fulfilled  its  engagements.  It  has 
paid  its  interest  scrupulously  and  punctually,  and  we  may  be  sure 
with  prudential  motives.  But  it  is  probable  that  every  rouble  of 
that  debt  is  held  abroad,  and  it  is  certain  that  all  of  it  is  believed  to 
be.  Its  power  of  further  borrowing  is,  therefore,  doubted,  and,  if 
we  are  well  informed,  it  has  striven  in  vain  to  negotiate  a  further 
loan  in  the  Stock  Exchanges  of  Berlin,   Paris,  and  Amsterdam. 


THE  POWER  OF  RAISING  LOANS.  439 

Lenders  of  money  to  government  are  neither  patriots  nor  politicians. 
The  strongest  assurance  that  the  loan  was  wanted  for  a  Slavonic 
purpose  would  not  get  cash  from  the  most  ardent  Panslavist.  Still 
less  would  a  Dutchman  or  German,  or  Frenchman  or  Englishman 
lend  his  money  to  the  Russian  government  for  political  reasons.  It 
is  lent  to  get  an  income,  and  if  the  prospect  of  the  income  is 
dubious,  either  because  the  government  is  incapable  of  bearing  a 
further  strain,  or  because  the  resources  of  the  country  are  sup- 
posed to  be  near  upon  exhaustion,  the  applicant  will  visit  the 
Stock  Exchanges  in  vain.  Even  Pitt's  *♦  patriotic  loan"  was  a 
failure. 

Perhaps  an  indication  of  this  possible  exhaustion,  not  it  may 
be  exactly  formulated,  but  not  the  less  real  or  dominant,  is  to  be 
found  in  the  demand  which  follows  on  a  war.  The  civil  war  in  the 
United  States  was  prodigiously  costly,  perhaps  more  costly  than  any 
recorded  war.  But  the  Republic  had  no  difficulty  in  borrowing 
after  the  war  was  over,  even  when  it  was  being  waged,  much  of  the 
stock  being  temporarily  held  in  England,  and  only  relinquished 
when  the  States  determined  on  making  their  public  debt  the  basis 
of  their  paper  currency.  Then  the  price  of  what  was  still  irredeem- 
able was  forced  up  so  high  that  holders  found  it  more  profitable  to 
sell,  and  now,  probably,  every  dollar  of  ]bhe  debt  is  held  by  the  States 
bankers.  After  the  Franco- German  War,  great  as  the  waste  of  it 
was,  neither  of  the  combatants  were  exhausted,  and  France  found  it 
easy  to  borrow  the  indemnity  which  it  paid,  and  the  charges  of  the 
war  which  it  incurred.  After  the  war  between  Russia  and  Turkey, 
both  combatants  were  exhausted.  The  credit  of  Turkey  was  entirely 
gone,  that  of  Russia  strained  so  considerably  that  loans  became 
impracticable.  The  test  of  this  state  of  things  is  to  be  found  in  the 
exports  and  imports,  for  war  is  waste,  and  when  the  militant  countries 
cannot  relieve  the  waste  from  their  own  resources,  they  purchase 
what  they  want  by  the  export  of  securities.  Now  the  market  for 
these  securities  was  narrowed,  if  not  extinguished.  When  the 
younger  Bismarck  told  me,  no  doubt  repeating  what  I  knew  to 
have  been  his  father's  criticism  on  the  situation,  that  ten  years  ago, 
the  Tzar  invited  revolution  if  he  did  not  go  to  war,  and  banl^ruptcy 
if  he  did,  he  expressed  in  political  language  what  I  am  trying  to 
give  you  in  economical. 


440  PUBLIC  DEBTS. 

In  the  government  of  British  India,  to  those  who  look  below  the 
surface,  the  fact  that  its  debt,  unproductive  and  productive  (and  by 
the  former  I  mean  the  costs  incurred  for  wars,  by  the  latter,  those 
expended  on  railways)  is  almost  entirely  held  abroad,  is  not  reassuring. 
The  mass  of  the  Hindoos  is  poor,  but  there  is  great  wealth  among 
some  of  the  native  merchants  and  professional  people.  A  Calcutta 
counsel  is  supposed,  as  I  am  informed,  to  rival  his  English  fellow 
subjects  in  lucrative  employment.  The  native  merchants  are  many 
of  them  reputed  to  be  rich.  But  India  stock  is  generally,  govern- 
ment and  railway  alike,  held  in  England.  Some  of  the  native 
patriots  complain  loudly  that  the  resources  of  India  are  diminished 
by  the  dividends  transmitted  to  England  in  consideration  of  the 
capital  invested  in  Indian  railways.  They  have  said  as  much  to 
me,  and  I  have  told  them  that  there  is  an  easy  remedy  for  the 
grievance  of  which  they  complain — they  may  buy  the  stock  them- 
selves. But  for  some  reason  or  other,  the  advice  does  not  seem 
palatable.  The  English  nation,  I  presume,  are  reputed  to  be  the 
government  of  India  ;  of  course  I  mean  by  Parliament.  This  is  a 
fiction,  I  admit,  for  it  is  very  hard  to  get  a  house  together  for  the 
Indian  budget.  But  it  is  a  common  weakness  with  nations,  one 
from  which  our  own  is  not  exempt,  to  expect  great  things  from 
government,  and  to  grudge  the  sacrifices  which  are  necessary  in 
order  to  get  the  great  things.  Perhaps  we  have  been  in  this  country 
historically  disappointed  in  our  expectations,  and  have  had  to  make 
the  sacrifices. 

In  the  British  colonies,  most  of  the  loans  have  been  for  reproduc- 
tive purposes.  British  capital  has  constructed  most  of  the  colonial 
railways,  for  the  colonists,  even  when  their  finance  is  wise,  and  that 
is  seldom,  can  do  better  with  their  own  money  than  to  lend  it  for 
public  works.  But  even  here  a  mistake  may  be  made  by  the  colony. 
If  I  were  a  British  colonist,  nothing  would  cause  me  to  distrust  a  poli- 
tical advocate  more,  than  reference  to  the  illimitable  resources  of  the 
colony,  and  to  the  importance  of  its  taking  an  imperialist  place  in  a 
great  empire.  Both  may  be  true,  but  the  translation  of  either  into 
active  business  may  be  disastrously  premature.  For  in  new  countries, 
whatever  may  be  the  future  capacity,  predicted  by  the  geologist  or 
the  speculative  physicist,  the  limit  is  unluckily  economical,  and  is 
the  capital,  the  population,  the  market  of  the  settlers,  and,  of  course, 


INDIA  AND  THE  COLONIES.    PAPER  LOANS,  441 

its  industrial  skill,  which,  in  deference  to  Mr.  Mill's  opinion,  it  almost 
invariably  takes  care  to  cripple  or  stultify  by  Protection.  But  all  its 
debt  is  held  out  of  the  country,  and  if  the  impression  gets  abroad 
that  it  has  spent  more  than  it  can  earn  wherewith  to  pay  the 
interest,  and  that  it  is  likely  to  do  so,  tbe  colony's  borrowing  powers 
will  soon  be  arrested.  There  is  no  little  reason  to  believe  that  the 
policy  which  has  been  inculcated  by  ignorant  or  self-interested 
people  on  these  young  settlements  is  already  leading  to  serious 
economical  complications ;  and  if  these  precipitate  events,  neither 
colonial  borrowers  nor  English  creditors  will  have  reason  to  be 
satisfied  with  the  counsellors  of  a  rashly  progressive  policy,  with 
their  tools  and  with  their  dopes. 

The  safest  of  pubHc  debts,  then,  are  those  which  are  held  almost 
exclusively  by  the  inhabitants  of  the  country  which  issues  them. 
But  I  have  not  quite  exhausted  the  elements  of  distrust.  There 
is  one  which  governments  are  capable  of  inflicting,  and  subjects 
are  powerless  to  avoid.  This  is  the  issue  of  an  inconvertible 
government  paper,  such  an  expedient  being  adopted  in  order  to 
create  an  internal  debt.  Practically  such  an  issue  is  a  forced  loan, 
to  which  the  poorer  classes  contribute  more  heavily  than  the 
richer,  particularly  more  than  the  mercantile  classes,  who  know 
in  the  course  of  their  trade  how  to  discount  the  paper,  and  even 
to  make  a  small  profit.  Now,  if  a  government  is  moderate  in  the 
issue  of  such  a  paper,  the  necessity  which  every  community  has 
for  a  measure  of  value  (coin  invariably  disappearing  when  an 
inconvertible  paper  is  put  upon  the  country)  will  keep  up  the 
internal  or  nominal  value  to  a  point  considerably  in  excess  of  its 
exchange  value,  the  true  measure  of  depreciation.  At  the  present 
time  two  European  governments  have  a  forced  paper  circulation, 
Austria  and  Russia.  The  exchange  value  of  the  Austrian  paper 
florin  is  from  15  to  20  per  cent,  below  the  silver  florin,  that  of  the 
Russian  rouble  not  half  the  silver  value.  But  we  are  told  that 
internal  prices  have  not  materially  risen  in  either  country.  The 
reason  is  not  that  the  redemption  and  retirement  of  the  paper  is 
anticipated,  and  that  therefore  an  Austrian  or  Russian  cherishes 
a  hope  which  the  foreigner  cannot  be  expected  to  entertain,  or  that 
specie  exchanges  as  other  commodities  do,  for  no  less  or  no  more 
than  the  amount    which    the    paper    nominally  represents,  but 


442  PUBLIC  DEBTS, 

because  in  tlieir  internal  trade  the  inhabitants  of  these  two 
countries  have  no  choice  in  their  circulating  medium.  But  the 
fact  remains  that  such  a  currency  is  a  debt,  which  should  be 
redeemed  as  much  as  a  public  debt  is,  forms  part  of  the  govern- 
ment's liabilities  as  much  as  that  public  debt  is,  and  is  to  be 
calculated,  as  far  as  possible,  when  there  is  a  wish  to  form  an 
estimate  of  a  government's  solvency. 

The  extent  to  which  a  forced  paper  currency  can  be  cir- 
culated without  producing  its  effects  on  internal  prices 
depends  on  the  discretion  of  government.  If  it  merely 
displaces  the  metallic  currency  but  little  effect  is  produced, 
for  a  slight  difference  will  make  the  metal  disappear.  But  if, 
through  ignorance  or  necessity,  the  issues  greatly  exceed  the 
public  wants,  the  depreciation  may  be  rapid,  and  internal  prices 
may  be  so  rapidly  exalted  that  the  paper  is  utterly  discredited. 
Such  was  the  case  with  the  paper  money  of  the  French  Eevolution, 
when  notes  to  an  enormous  extent  were  issued  under  the  name 
of  assignat  or  mandat,  were  ordered  to  be  taken  at  their  nominal 
value  under  the  threat  of  capital  punishment  to  the  reluctant 
trader,  were  withal  discredited,  and  were  finally  repudiated  by  the 
government  itself.  Such  again  were  the  paper  moneys  of  the 
American  War  of  Independence,  when  the  colonies  found  it  impossible 
to  keep  their  pledge  of  redemption.  In  a  limited  sense  such  was 
the  experience  of  the  greenbacks  in  the  Civil  War,  the  forced  cir- 
culation of  which,  owing  to  Wall  Street  intrigues,  was  carried  on 
long  after  any  justification  of  the  policy  had  ceased.  Such  was 
the  experience  of  the  suspension  of  cash  payments  by  the  Bank 
of  England  in  1797.  Now  the  bank  note  from  this  date  till  1819, 
when  the  resumption  took  place,  was  in  one  sense  a  government 
paper,  for  the  non-convertibility  of  it  was  an  act  of  government. 
In  another  sense,  it  was  the  issue  of  a  private  corporation,  for  all 
the  profits  of  the  transaction  theoretically  remained  in  the  hands 
of  the  Bank.  For  some  years  the  note  was  not  depreciated  in  ex- 
change value.  It  is  true  all  metallic  currency  had  disappeared, 
except  worn  silver.  But  the  notes  had  only  filled  up  the  void 
which  the  disappearance  of  gold  had  created.  But  at  or  about 
the  year  1807,  the  Bank  directors  transgressed  the  caution  which  they 
had  previously  exercised,  and  issued  notes  in  excess  of  the  public 


INCONVERTIBLE  PAPEB.     TAXATION  OF  DIVIDENDS.  443 

want.  The  consequence  was  that  the  exchange  value  fell,  prices 
correspondingly  rose,  and  the  consequences  of  a  forced  paper 
circulation  in  a  trading  community  made  themselves  exceedingly 
apparent.  I  shall  show  in  the  course  of  this  lecture,  what  were  its 
effects  on  the  rapidly  increasing  debt  of  the  United  Kingdom. 

Again,  the  credit  of  a  country  is  affected  by  distrust  when  it 
taxes  the  dividends  which  it  has  covenanted  to  pay.  This  breach 
of  faith,  as  it  must  be  called,  was  committed  by  the  Itahan 
government.  To  levy  a  tax,  however  light,  on  the  dividends 
payable  on  a  pubHc  debt  is,  disguise  it  as  one  will,  a  partial  re- 
pudiation, differing  in  degree  only,  and  not  in  principle,  from  a 
total  repudiation.  We  in  England  levy  an  income  tax  on  dividends 
of  government  stocks.  The  awkwardness  of  this  action  was 
justified  by  Sir  Eobert  Peel,  and  since  that  by  Mr.  Gladstone, 
on  the  ground  that  remissions  of  duty  left  a  larger  margin  to 
consumers,  £.«.,  to  the  recipients  of  dividends,  and  that  therefore 
they  might  be  expected  to  make  compensation.  But  a  remission 
of  duty,  unless  the  remission  is  very  large,  is  not  necessarily 
followed  by  a  lowering  of  price.  It  does  not  necessarily  ensue 
that,  if  an  excise  is  taken  off  bricks  and  tiles,  the  charge  for  house- 
rent  will  be  lessened.  No  doubt,  the  abolition  of  taxes  on  food 
would  more  than  compensate  for  the  imposition  of  an  income  tax. 
But  Peel's  first  tariff  reforms  rather  benefited  the  trader  and  manu- 
facturer than  they  did  the  consumer,  and  I  shall  have  occasion  in 
a  further  lecture  to  point  out  what  have  been  the  fortunes  and  what 
is  the  present  distribution  of  the  income  tax.  But  the  principle 
on  which  the  income  tax  on  dividends  was  justified  or  defended 
is  still  maintained.  It  is  and  remains  a  tax  on  consumers,  for  it 
is  not  enacted  on  the  recipients  of  dividends  on  income  when 
the  recipients  live  out  of  the  United  Kingdom.  The  Italian 
government  levies  it  on  all  indiscriminately.  Now  this  is,  I 
repeat,  a  partial  confiscation  or  repudiation,  and  inevitably  a  cause 
of  distrust.  On  the  other  hand,  Italy  has  retired  her  forced 
paper  currency. 

The  circumstances,  then,  under  which  a  government  can  most 
easily  borrow  funds,  and  pledge  the  future  industry  of  a  country 
to  the  repayment  of  interest  and  x>riiicipal  are — 1.  That  it  borrows 
principally  from  its  own  subjects.     2.  That  it  makes  its   loans 


444  PUBLIC  DEBTS. 

when  the  country  gives  every  guarantee,  either  by  its  saving 
power,  or  by  its  progressive  abiUty,  that  the  burden  imposed  may 
be  met.  3.  That  it  preserves,  in  its  relations  to  its  creditors, 
unimpeachable  good  faith.  4.  That  there  exists  in  the  country 
a  class  of  persons  who  are  not  only  able  to  invest  in  such  securities, 
but  for  various  reasons  are  eager  to  do  so.  5.  That  the  borrowing 
government  gives  every  facility  for  the  cheap  and  rapid  transfer 
of  such  securities  from  band  to  hand,  so  that  they  may  be  the 
best  possible  security  for  temporary  loans,  and  the  most  con- 
venient form  for  temporary  investments.  Hence,  it  is  not  only 
just  to  the  creditor,  but  expedient  for  the  government  to  make  its 
own  securities  exempt  from  all  transfer  taxes  or  duties.  6.  That 
if  possible  its  loans  are  effected  for  reproductive  objects. 

These,  then,  are  loans  negotiated  under  ideal  conditions.  I  say 
ideal,  for  I  do  not  believe  that  all  the  foregoing  six  conditions 
have  ever  been  fulfilled  in  any  of  these  borrowings.  Of  course, 
the  most  excusable  loan  conceivable  is  that  which  fulfils  the  last 
condition.  But  out  of  the  great  mass  of  public  debt  which 
civilized  societies,  and  some  societies  which  it  is  perhaps  a  more 
or  less  extravagant  compliment  to  call  civilized,  very  few  loans 
have  satisfied  the  last  condition.  Even  when  they  have  pre- 
tended to  satisfy  it,  there  is  often  a  doubtful  or  second  purpose 
in  the  professed  object.  For  example,  loans  have  often  been  made 
for  the  construction  of  railways,  for  instance,  in  Eussia  and  the 
British  colonies.  But  for  the  former,  it  is  notorious  that 
military  communications  were  the  principal  objects  of  the  loan, 
"when  the  pretence  was  a  mercantile  one.  For  the  latter,  it  has 
been  too  frequently  the  cas3,  that  local  interests  have  induced 
or  constrained  colonial  governments  to  make  expenditure  which 
■will  be  so  remotely  profitable,  that  the  interest  on  the  advance 
will  swallow  up  the  principal  before  there  is  any  prospect  that 
the  public  works  will  be  remunerative.  Occasionally  the  true 
purposes  of  the  colony  have  been  sacrificed  to  what  are  called 
imperial  interests,  a  fine  sounding  phrase,  which  may  mean  any- 
thing, and  generally  means  nothing,  but  which  has  the  support 
of  adventurers  in  the  colony,  and  unintelligent,  because  ignorant, 
politicians  at  home.  Nations,  like  individuals,  may  be  induced 
to  launch  out  beyond   their  means,   to   recklessly  discount  the 


THE  OBDINABY  OBJECT  OF  LOANS.  446 

future,  to  believe,  as  Adam  Smith  says,  that  their  fortunes  or  their 
abiUties  can  stand  a  greater  strain  than  experience  warrants.  In 
such  cases,  there  is  apt  to  be  a  sudden  arrest,  perhaps  an  undue 
alarm,  frequently  the  adoption  of  what  is  believed  to  be  a  recuperative 
process,  which  may  be  more  disastrous  than  the  original  speculation. 
Unless  I  am  greatly  mistaken,  the  economical  condition  of  many 
of  the  British  colonies  is  far  from  satisfactory,  and  to  bring  this 
about,  English  statesmen  have  unconsciously  lent  themselves,  and 
colonial  adventurers  have  only  been  too  willing  to  further 
folly. 

There  can  be  httle  doubt  that  nations,  when  a  serious  emergency 
overtakes  them,  are  justified  in  using  every  and  nearly  any  means, 
in  order  to  avoid  collapse,  or  even  the  enforced  cessation  of 
progress.  But  it  is  open  to  very  great  doubt,  whether,  on  many 
occasions  in  the  history  of  communities,  the  facility  with  which 
loans  have  been  made  is  not  a  more  effectual  bar  to  progress  than 
that  which  has  seemed  to  an  existing  generation  to  be  formidable,  and 
whether  it  has  not  encouraged  ventures  in  which  success  is  almost 
as  disastrous  as  failure.  Again,  it  is  a  question  of  the  greatest 
importance  as  to  whether  a  present  difficulty  justifies  the  burden- 
ing of  future  industry,  the  restraint  of  a  coming  generation. 
There  is  a  commonplace  with  some  reasoners  on  this  subject,  that 
the  generation  to  come  succeeds  to  a  splendid  inheritance,  which 
the  wisdom  of  a  past  age  has  protected,  but,  of  necessity,  has 
burdened.  But  what  may  the  future  generation  say  about  the 
legitimacy  of  the  charge  ?  They  may  retort  that  the  charge  was, 
after  all,  a  gambhng  debt,  which  the  riper  intelligence  of  a  later 
age  has  analysed  and  detected.  Chatham  imagined  that  in  creating 
a  sole  market  for  the  British  merchant  and  manufacturer,  he 
justified  the  permanent  charges  of  the  Seven  Years'  War.  The 
experience  of  the  war  of  American  independence,  by  which  that 
theory  of  a  sole  market  was  tested,  in  which  another  debt  of  even 
greater  amount  was  incurred,  proved  that  the  theory  was  as  base- 
less as  the  South  Sea  Bubble.  Is  the  future  to  be  indefinitely 
pledged  to  the  errors  of  the  past  ?  And  then  when  we  remember 
that  all  finance  in  inevitably  based  on  the  contributions  of  those  who 
work  for  wages,  and  cannot  escape  the  tax-gatherers,  what  may 
they  say  in  the  future  who  have  no  share   in  the   inheritance? 


446  PUBLIC  DEBTS. 

Surely  the  wisest  course  is  to  pay  off  debt  as  soon  as  can  be,  and 
incur  as  little  as  possible  in  the  future. 

In  a  well-known  passage,  Macaulay  has  commented  on  the 
alarms  which  bygone  generations  of  EngHshmen  have  expressed  at 
the  growing  magnitude  of  the  public  debt,  and  he  has  pointed  out 
with  great  cogency  how  the  growth  of  wealth  has  been  incompar- 
ably more  rapid  than  the  growth  of  debt.  But  I  conceive  that 
even  in  the  ages  when  the  debt  was  contracted,  it  must  have  been 
clear  that  wealth  grew  faster  than  debt  did,  else  how  could  the  debt 
have  been  raised  ?  Beyond  question  during  the  great  continental  war, 
the  debt  grew  with  frightful,  with  unexampled  rapidity,  and  wealth 
grew  with  it.  But  wealth  was  very  unequally  distributed,  was  the 
share  of  very  few  persons.  Mr.  Porter  has  shown,  in  his  **  Progress 
of  the  People,"  that  the  costs  of  that  great  struggle,  as  far  as 
England  was  concerned,  was  borne  by  those  who  lived  on  wages,  or 
were  engaged  in  genuine  industrial  callings.  In  those  times,  the 
criticism  of  those  who  had  to  pay  was  unheeded.  English  finance 
was  or  became,  like  the  Dutch  finance  of  the  wars  of  independence, 
a  tax  on  every  function  of  life,  on  all  its  enjoyments,  on  all  its 
necessities.  But  such  people  had  to  endure  in  silence,  or  at  best  to 
murmur  inarticulately  for  all  practical  purposes.  I  do  not  doubt 
that  had  they  found  a  voice,  and  had  their  voice  been  effectual,  the 
policy  of  Pitt  and  his  successors  would  have  been  challenged.  For, 
I  repeat,  it  is  a  maxim  in  finance,  that  the  sufferings  of  the  nation, 
when  taxation  is  heavy,  are  the  sufferings  of  the  poor,  that  beyond 
naked  confiscation,  or  as  a  statesman  has  said,  by  the  ransom  of 
their  property  only,  can  taxation  really  touch  the  rich.  Now  it  is 
an  expedient  which  is  full  of  danger  to  visibly  increase  the  area  of 
taxation,  if  that  taxation  is  to  be  effective.  I  challenged  the 
Chancellor  of  the  Exchequer  in  1886  to  tell  the  House  of  Commons 
what  new  tax  he  could  impose  without  risk  to  himself  and  to  his 
Government,  and  I  could  get  no  answer  from  him.  The  days 
of  Vansittart  are  gone  by. 

Loans  based  upon  imperial  or  local  pledges,  are  of  two  kinds, 
permanent  or  consolidated,  and  temporary  or  terminable.  In  the 
first  case,  the  payment  of  the  interest  is  guaranteed,  and  the 
redemption  of  the  principal  is  left  to  the  discretion  or  convenience 
of  the  debtor.     In  the  second,  the  payment  and  the  redemption  are 


PERMANENT  AND  TERMINABLE  LOANS.  447 

nnited  in  the  same  act.  Now  it  would  be  beneficial,  if  all  loans 
were  of  the  later  class,  and  of  late  years,  financiers  have,  with  some 
success,  planned  the  extinction  of  debt  by  terminable  annuities. 
But  there  are  always  two  difficulties  in  the  way  of  this  desirable 
policy.  In  the  first  place,  only  a  few  persons,  or  a  few  classes  of 
investors,  look  with  favour  on  a  security  which  is  annually  decreas- 
ing in  value.  Now  for  actuarial  reasons,  to  be  an  effective 
relief,  the  terminable  annuity  must  rapidly  decrease  in  value.  Then, 
as  I  have  stated,  it  is  all  important  in  government  loans,  that  the 
security  should  be  readily  saleable  or  convertible.  But  there  are 
more  permanent  and  entirely  safe  investments,  which  bear  a  higher 
interest  than  terminable  annuities  do,  but  are  not  immediately  con- 
vertible. Now  the  agents  who  are  most  Hkely  to  negotiate  termin- 
able securities  are  those  who  do  not  desire,  as  traders  and  bankers 
do,  securities  which  can  be  sold  at  one  hour's  notice,  or  can  be 
pledged  to  nearly  their  full  market  value.  Hence  the  market  for 
terminable  securities  is  limited,  and  in  order  to  float  them,  a 
rlnancier  must  make  an  actuarial  loss,  or  offer  them  at  less  than 
they  are  intrinsically  worth.  In  the  second  place,  the  negotiation 
of  such  securities,  owing  to  the  income  tax,  is  difficult,  for  it  will  be 
plain  to  you  that  if  3  per  cent,  is  paid  on  a  terminable  annuity,  it 
is  a  heavier  tax  than  3  per  cent,  paid  on  a  perpetual  annuity. 
In  the  former  it  is  8  per  cent,  on  principal  and  interest,  in  the 
latter  3  per  cent,  on  interest  only.  For  reasons  which  I  hope 
to  make  plain  when  I  deal  with  modern  taxation,  it  is  by  no  means 
easy  to  make  the  English  income  tax  accommodate  itself  to  this 
manifestly  imequal  charge. 

It  now  remains  that  I  should  give  yon,  after  having  spoken  at  some 
length  on  the  economical  principles  which  are  involved  in  the 
system  of  creating  public  debts,  some  historical  facts  and  illustra- 
tions which  will  illustrate  what  I  have  said. 

The  English  public  debt  is  almost  entirely  the  creation  and  out- 
come of  the  Revolution  of  1688.  It  is  even  made  a  reproach  of 
that  great  event.  It  is,  if  the  anticipation  of  future  revenue  can  be 
justified,  and  if  the  occasion  on  which  the  anticipation  was  made 
can  be  defended,  greatly  to  its  reputation.  Loans  were  probably 
negotiated  by  despots  in  the  days  of  Ninus  and  Sesostris.  There 
are  notices  of  such  transactions  in  the  time  of  the  Athenian  and 


448  PUBLIC  DEBTS. 

Eoman  republics,  and  these  were  apparently  liquidated.  Loans 
were  raised  by  Philip  II.  and  Louis  XIV.,  and  were  followed  by 
repudiation.  There  is  this  danger  in  a  loan  to  a  despotic  govern- 
ment, that  its  first  concern  is  its  own  security,  and  to  that  it  will 
sacrifice  the  most  sacred  pledges  by  this  the  law  of  its  nature.  The 
City  of  London,  as  I  have  lately  shown,  lent  to  James  L  and 
Charles  L,  but  took  care  to  have  security.  It  was  in  this  way  that 
the  Companies  aggregated  their  estates  in  county  Derry.  But  a  loan 
to  a  despotic  Government  is  always  a  precarious  loan.  I  cannot 
tell  when  these  people  wiU  repudiate,  but  that  they  will  preserve 
themselves  in  preference  to  their  creditors  is  ultimately  certain,  and 
will  do  so  all  the  quicker  if  their  neighbours  begin  to  suspect  their 
paper. 

I  will  readily  admit,  for  the  economical  interpretation  of 
history  has,  in  matters  of  finance,  to  take  account  of  political 
facts,  that  the  Parliament  of  the  Revolution  was  the  travesty  of  a 
Parliament.  But  behind  it,  and  to  be  conciliated,  was  the  moneyed 
interest.  In  these  Parliaments  for  many  a  year,  the  four  members 
for  the  City  of  London  were  of  more  importance  than  fifty  times 
their  number  from  Grampound,  Old  Sarum,  the  two  Looes,  and 
Gatton.  It  was  in  the  power  of  these  persons  to  keep  the  Govern- 
ment on  its  feet,  or  to  let  it  stagger.  The  London  merchant  of  the 
Revolution  and  of  the  two  wars  which  followed  the  Revolution, 
those  of  the  English  and  Spanish  succession,  exacted  no  heavy 
price  for  an  assistance  which  was  invaluable.  The  nation  had  got 
rid,  not  entirely  of  personal  government,  but  of  the  worst  features 
in  it,  and  any  Parliamentary  Constitution,  however  anomalous  it  was, 
however  much  it  might  cherish  forms  which  had  lost  their  vitality, 
was  better  than  the  dispensing  power,  and  a  corrupt  bench  of  judges. 
The  public  danger  in  the  days  of  the  Stuarts  came  so  nearly  home 
to  the  people  who  had  power,  that  the  existence  of  the  National 
Debt  was  looked  on  as  the  best  guarantee  of  the  Act  of  Settlement, 
in  which  the  least  significant  part  was,  if  we  are  to  judge  by  what 
was  written  at  the  time,  the  devolution  of  the  Crown  on  the  house 
of  Hanover.  I  have  no  doubt  that  the  risks  which  were  sure  to  be 
seen  in  the  event  of  the  old  line  being  restored  are  the  key  to  the 
indecision  of  Harley,  and  must  be  read  between  the  lines  in  the  savage 
disappointment  of   Atterbury  and  Bolingbroke,   when  the  latter 


THE  LOANS  OF  THE  REVOLUTION.  449 

described  his  colleague  and  rival.    You  will  find  it  quoted  by 
Hallam  as  of  the  old  Pretender.     It  is  really  of  Harley. 

Most  of  the  early  loans  were  terminable,  and  special  taxes,  as  is 
now  the  custom  in  countries  with  little  credit,  were  assigned  to  the 
interest.  I  have  told  you  before  that  the  existence  of  the  floating 
debt  was  a  scandal  to  William's  government  or  advisers,  and  I  think 
that  Bentinck  and  Zulestein,  if  they  were  anything  but  diplomatists, 
might  have  instructed  Montague  and  Godolphin  in  the  expedients  of 
Dutch  finance.  In  reality,  the  earliest  part  of  the  permanent  debt 
was  that  of  the  bankers,  the  money  which  nearly  thirty  years  before 
Charles  the  Second  stole,  when  he  conspired  with  Louis  XIV.,  in 
1672,  against  the  Dutch,  a  debt  which  was  funded  towards  the  con- 
clusion of  William's  reign,  but  on  condition  that  it  should  be  re- 
deemable on  payiug  a  moiety  of  the  principal.  I  am  disposed  to 
believe  that  the  difficulty  in  the  way  of  the  financiers  of  the  Eevolu- 
tion  was  the  impossibility  of  levying  solid  customs  duties,  in  the 
teeth  of  the  Owlers  and  their  sympathisers,  and  the  unpopularity  of 
excises.  The  English  people  is  said  to  be  a  highly  intelligent  race, 
but  it  has  a  persistent  habit  of  confusing  names  with  things.  This 
illogical  trick  is  poor  testimony  to  its  shrewdness,  but  statesmen,  I 
presume,  must  do  the  best  with  the  material  which  they  have  to 
deal  with,  and  be  excused  for  being  slow  in  insisting  even  on  neces- 
sary truths. 

The  creation  of  the  public  debt  of  Great  Britain  in  the  form  or,  at 
any  rate,  on  the  lines  with  which  we  are  familiar,  was  the  work  of        . ' 
those  who  manipulated  finance  in  Anne's  reign.     The  war  of  the       j\ 
Spanish  succession  was  the  opportunity  of  the  historic  Whigs ;  the       ^ 
peace  of  Utrecht,  which  sacrificed,  and  not  without  reason,  all  the 
efforts  and  all  the  expense  of  the  war,  was  the  work  of  the  historic 
Tories.    What  was  achieved  was  the  humiliation  of  Louis  XIV.,  the 
impoverishment  of  France,  and  the  admission  of  England  to  the 
lucrative  but  disgraceful  business  of  importing  African  slaves  into 
the  Spanish  possessions  in  the  New  World,  under  the  terms  of  the 
Assiento  treaty.   The  nation  which  imported  slaves  into  the  Spanish 
possessions,  mider  the  Assiento  treaty,  imported  them   into   the 
American  plantations  and  such  of  the  Leeward  Islands  as  belonged 
to  Great  Britain,  under  the  sole-market  theory.     The  first-fruit  of 
the  Assiento  treaty  was  the  South  Sea  Bubble,  the  last  was  the  civil 

80 


l^ 


450  PUBLIC  DEBTS. 

war  between  the  Nortliem  and  Southern  States  of  the  American 
Union,  for  the  American  people  justly  charge  the  historical  English- 
man with  being  the  cause  of  the  trouble  which  nearly  rent  the  Union 
in  twain  a  quarter  of  a  century  ago.  You  will  find,  as  you  study 
history,  that  economical  causes  have  had  much  to  do  with  the 
events  about  which  the  philosopher  of  history  dilates  and  prates 
chaotically. 

The  new  departure  which  Walpole  undertook  in  dealing  with  the 
public  debt  was  and  is  one  of  the  most  significant  economical  events 
of  the  eighteenth  century,  full  as  that  century  is  of  great  and  lasting 
facts.  The  early  debts  of  the  country  were  in  various  forms,  and 
secured  by  different  special  taxes.  They  were  sometimes  permanent, 
sometimes  terminable.  They  were  at  all  rates  of  interest.  Now, 
peace  was  generally  maintained  in  Europe  during  the  period  which 
intervened  between  the  treaty  of  Utrecht  and  the  War  of  the  Austrian 
succession.  In  this  period  English  commerce,  especially  with  the 
American  plantations,  made  great  progress,  and  the  country  was 
generally  prosperous,  for  the  new  agriculture  was  being  extended, 
prices  of  food  were  low,  the  profits  of  the  new  system  were  high,  and 
wealth  was  being  rapidly  accumulated,  not  by  the  traders  only,  but 
by  the  agricultural  classes.  The  rate  of  interest  fell  below  all  pre- 
vious experience,  and  opportunities  of  permanent  investment  were 
few.  Hence  the  price  of  stocks  rose  far  above  par,  and  the  time  was 
ripe  for  a  financial  experiment.  Walpole  was  paying  off  the  pubHc 
jjiebt  rapidly,  and  he  resolved  to  deal  with  the  residue.  He  deter- 
mined on  consolidating  the  various  debts,  and  consoHdating  the 
funds  from  which  provision  was  made  for  them.  He  contrived,  by 
the  offer  of  payment  at  par,  to  reduce  the  interest  on  the  debt,  and 
to  unite  most  of  the  pubHc  liabilities  into  a  common  stock,  since 
known  as  consols.  He  was  aided  in  his  policy  by  the  alarm  which 
had  been  expressed  at  the  magnitude  of  the  National  Debt. 

From  Walpole' s  innovation  is  dated  that  remarkable  departure  in 
the  finance  of  public  debt,  which  has  been  imitated  by  all  nations 
subsequently.  It  is  plain  that  a  borrower  must,  according  to  the 
state  of  the  market,  the  plenty  or  scarcity  of  money,  and  the  solidity 
of  the  security  offered,  vary  the  rate  of  intei'est  which  he  proposes  to 
the  lender,  giving  less  or  more  as  the  circumstances  are  more  or  less 
favo^irable.    And  this  is  the  ordinary  way  in  which  interest  on  more 


THE  SYSTEM  OF  BOBBOWING,  451 

or  less  permanent  advances,  and  discount  on  temporary  advances, 
i.e.,  the  negotiation  of  commercial  bills  are  determined,  the  key  to 
the  latter  being  supplied  by  the  official  rate  of  discount  settled  by 
the  Bank  of  England,  and  announced  to  the  public.  The  circum- 
stance which  principally  determines  the  Bank  of  England  in  fixing 
this  rate  is  the  abundance  or  scarcity  of  the  metallic  reserve  which 
it  possesses  itself,  though  this  is  by  no  means  the  only  cause  of 
action,  as  great  competition  for  discounts,  due  to  a  real  or  imaginary 
alarm  as  to  the  immediate  future,  may,  apart  from  bullion  move- 
ments, necessitate  or  appear  to  necessitate  a  rise.  Hence,  the  rate, 
of  discount,  i.e.,  of  inverted  interest,  is  subject  to  much  greater  and 
more  numerous  fluctuations  than  the  rate  of  ordinary  interest. 
Public  stocks,  as  they  are  a  peculiarly  convenient  form  of  pledge, 
partake  of  the  nature  of  short-dated  bills  and  ordinary  investments. 
They  are  less  Hable  to  fluctuation  than  the  former,  more  than  the 
latter. 

A  borrowing  government  always  makes  it  a  condition  with  its 
credifor  that  the  latter  may  not,  as  most  creditors  can,  demand  re- 
payment of  the  advances  which  he  makes,  at  pleasure  or  after  notice. 
The  motive  of  this  precaution  is  plain.  A  government  cannot, 
especially  in  a  serious  crisis  of  pubHc  affairs,  be  exposed  to  the  risk, 
in  addition  to  its  other  difficulties,  of  a  run  on  its  exchequer,  for  it 
does  not  borrow,  as  a  trader  or  a  banker  does,  of  all  comers  at  all 
times.  But,  on  the  other  hand,  it  reserves  to  itself  the  right  of 
paying  off  its  creditor  at  its  pleasure.  If  it  has  a  surplus  in  the 
treasury  it  can,  and  under  recent  statutes  must,  purchase  its  own 
stock  in  the  open  market,  where  its  securities  are  always  saleable, 
and  extinguish  as  a  debt  that  which  is  purchased.  This  rule  is  abso- 
lute, so  absolute  that  if,  in  the  appropriation  of  supply.  Parliamentary 
grants  are  found  to  be  in  excess  of  departmental  demands,  the  sur- 
plus cannot  be  devoted  to  any  other  service,  but  must  be  appUed  to 
the  extinction  of  debt.  Now  a  supplementary  estimate  is,  under 
ordinary  circumstances,  bad  finance,  and,  unless  an  adequate  expla- 
nation is  given,  is  prima  facie  censurable.  Hence  the  departments, 
though  under  the  criticism  of  the  estimates  (which  is  indirectly  much 
more  effective  than  the  outside  public  imagines)  they  strive  to  reduce 
this  quota  to  the  lowest  amount  which  the  services  are  content  to 
accept,  generally  seek  to  have  some  margin  over,  and  thus,  in  a 


452  PUBLIC  DEBTS, 

normal  condition  of  finance,  stock  is  regularly  purchased  and  extin- 
guished every  year. 

Sometimes,  however,  when  the  price  of  stocks  is  very  high,  or,  in 
other  words,  when  a  large  amount  of  savings  is  seeking  investment, 
the  government  can  venture  on  a  larger  operation.  After  carefully 
sounding  the  market,  it  can  exercise  its  right  of  offering  the  creditor 
the  election  of  having  his  money,  a  hundred  paid  for  a  hundred, 
really  or  nominally  lent,  refunded  in  full,  with  the  alternative  of 
accepting  a  lower  rate  of  interest.  It  will  be  plain  that  it  can  under- 
take this  operation  with  success  only  when  its  creditor  is  placed  in 
such  a  position  as  to  make  him  see  that  to  accept  payment  in  full 
would  be  less  profitable  than  to  accept  the  lower  rate  of  interest.  Of 
course  it  may  give  him,  as  an  expedient,  a  higher  nominal  principal, 
e.g.,  105  stock  at  the  lower  rate  of  interest  in  place  of  100  at  the 
higher,  and  in  other  ways,  with  which  I  need  not  trouble  you.  It  is 
also  important  to  observe  that  when  the  public  debt  is  held  in  small 
parcels  by  great  numbers  of  persons,  as  in  France,  the  operation  of 
converting  a  debt  bearing  high  interest  to  one  bearing  low  interest 
is  more  difficult,  not,  perhaps,  because  it  produces  discontent  among 
the  holders  of  the  debt  so  much  as  because  the  trouble  of  the 
transfer  may  be  excessive,  and  the  cost  outweigh  the  gain. 
V  ,  Now  Walpole  turned  the  greater  part  of  the  existing  debt  into  a 
\7l  4  per  cent,  stock.  The  times  were  favourable.  But  his  successors 
in  creating  future  debt  adopted,  on  the  whole,  the  other  alternative 
of  borrowers.  They  fixed  the  rate  of  interest,  and  varied  the 
amount  of  the  principal,  offering  £100  consols  at  the  price  which 
the  public  would  give  for  them,  or  financial  agents  would  under- 
write, that  is,  guarantee  for  them.  The  price  paid  for  new  issues  of 
consols  has  greatly  varied.  During  part  of  the  continental  war,  it 
was  more  than  once  a  good  deal  below  £50,  and  the  Government 
had  to  give  £100  stock  for  less  than  £50  cash,  that  is,  to  virtually 
pay  over  6  per  cent,  for  its  loan. 

This  proceedmg,  which  got  the  name  of  the  funding  system,  has 
been  severely  criticized.  From  one  point  of  view  the  criticism  is 
obvious.  By  taking  a  low  rate  of  interest,  and  covenanting  to 
redeem  at  par,  the  Government  deliberately  debars  itself  from 
cuttmg  down  the  interest  in  the  future,  under  the  operation  which 
I   have  described.      And  then   the   critics   go   on  to  say,    **  The 


TEE  FUNDING  SYSTEM,  453 

greater  part  of  the  public  debt  by  no  means  represents  the  cash 
that  has  been  paid  for  it.  Lucky  fundholders,  who  invested  at  the 
price  of  60  or  less,  are  receiving  6  per  cent,  in  perpetuity,  and  at  a 
time  when  8  per  cent,  has  practically  become  normal.  The  finan- 
ciers who  have  adopted  the  funding  system  are  putting  the  English 
people,  whose  savings  are  pledged  to  the  payment  of  interest,  in  a 
worse  position  than  the  financiers  of  the  Eevolution  put  them,  who 
did  indeed  pay  6  per  cent.,  but  in  such  a  manner  as  left  the 
door  open  for  the  future  reduction  of  interest.  This  door  their 
successors  have  effectually  closed,  for  there  cannot  be  a  very  clear 
prospect  of  much  reduction  below  3  per  cent.  The  nation,  in  brief, 
is  constrained  to  pay  money  which  it  never  received,  and  to  be 
charged  with  a  high  though  hidden  interest  in  the  interval." 

The  criticism  is  plausible,  but  there  is  an  answer  to  it.  "  The 
very  circumstance,"  it  may  be  said,  *'  which  you  are  alleging  must 
have  been  present  to  the  minds  of  those  who  negotiated  the  loan, 
and  to  those  who  purchased  it,  or  invested  in  it.  The  publio 
creditor  knew  well  enough  that  there  was  little  risk  that  his  stock 
would  be  converted,  and  he  realized  this  favourable  feature  of  the 
loan  in  his  mind,  when  he  made  his  offer.  He  gave  more  than 
he  would  have  given,  if  he  had  not  been  assured  against  the  risks 
of  a  reduction.  It  is  true  that  he  paid  £50  or  less  for  every  £100 
stock.  Suppose  you  had  borrowed  in  a  stock  paying  a  high  rate 
of  interest,  but  liable  to  conversion,  you  would  have  probably  had 
to  pay,  not  6  per  cent,  in  perpetuity,  but  8  per  cent,  or  10  per  cent. 
for  a  long  time  to  a  lender  who  assisted  you  in  your  necessities,  but 
would  have  assuredly  had  his  services  forgotten  as  soon  as  you, 
being  in  funds  again,  could  force  him  to  acquiesce  in  far  less 
favourable  terms.  You  have  reserved  to  yourselves  the  right  of 
redemption  at  par,  and  you  must  take  all  the  consequences  of  this 
right,  when  you  deal  with  people  whom  you  invite  to  consider  their 
own  interests,  while  you  are  considering  yours."  Most  of  the  best 
financiers  with  whom  I  have  reasoned  on  this  matter  state  the  case 
of  the  government  as  I  have  given  it,  and  conclude  that  not  only 
did  the  administration  borrow  in  the  easiest,  but  in  the  cheapest 
way. 

This  subject  has  not  only  been  discussed  by  political  economists 
as  a  speculative  question,  and  within  that  part  of  the  subject  in 


464  PUBLIC  DEBTS. 

which  they  are  most  likely  to  be  right,  the  domain  of  money, 
finance,  and  the  exchanges,  where  practical  experience  is  always  at 
hand  to  correct  the  crudities  of  metaphysics,  but  it  has  been 
debated  under  very  plausible  circumstances  in  the  House  of  Com- 
mons. In  the  prolonged  and  somewhat  heated  discussions  on  the 
suspension  of  cash  payments,  after  the  absurdities  of  Mr.  Van- 
sittart  and  Lord  Stanhope  were  combated,  for  a  time  with  little 
success,  by  Lord  King  and  Mr.  Horner,  a  question  at  that  time 
conveniently  kept  in  the  background  by  the  government  necessarily 
came  to  the  front,  and  was  pressed  by  the  very  men  who  had 
defended  Mr  Vansittart's  motion  and  Lord  Stanhope's  law.  For 
when  the  war  was  over,  and  the  restoration  of  the  currency  was 
demanded,  these  people  argued  as  follows,  forgetful  of  their  dogma, 
that  "  the  value  of  the  bank-note  had  not  fallen,  but  that  of  gold  had 
risen  "  :  **  We  are  left,  now  that  this  just  and  necessary  war  (oce  of 
the  stock  phrases  of  politics)  is  over,  with  an  enormous,  a  crushing 
load  of  debt.  Prices  of  agricultural  produce  are  falling,  and  the 
agiicultural  interest  is  threatened  with  ruin.  There  is  great  dis- 
content abroad,  just  discontent,  which  in  the  interest  of  law  and 
order  (another  stock  phrase)  we  are  obliged  to  repress  by  severe 
measures,  by  a  regrettable  extension  of  the  criminal  law,  happily  and 
adequately  supplied  by  the  vigour,  bravery,  and  forethought  of  Lords 
Sidmouth  and  Castlereagh.  But  we  have  to  endure,  in  addition  to 
our  misfortunes,  the  sight  of  the  stock-jobbers  and  fundholders,  who 
have  fattened  on  our  misery,  and  are  now  receiving  more  than  half 
our  taxes.  And  for  what?  We  have  put  down  the  Corsican 
usurper,  and  restored  peace  to  Europe,  legitimacy  to  its  thrones. 
These  people  not  only  get  under  our  funding  system  at  par,  stock, 
with  a  number  of  incidental  advantages,  in  exchange  for  some  £50 
or  less,  but  they  paid  this  inadequate  quota  in  notes  which  were 
constantly  at  a  discount  of  30  per  cent.  It  is  intolerable,  it  is 
unjust,  that  we  should  redeem  the  stock  under  the  terms  of  so 
monstrous  and  one-sided  a  bargain.  It  is  enough  that  we  should 
keep  faith  with  them  when  they  made  their  advantage  out  of  our 
straits.  But  to  pay  them  in  full-weighted  sovereigns  would  be 
suicidal.  For  years  past  the  one-pound  note  has  been  worth  only 
14s.  6d.  We  must  issue  sovereigns  for  the  future  at  the  rate  at 
which  notes  have  been  discounted,  and  the  financial  harpies  will 


THE  BETUBN  TO  CASH  PAYMENTS,    FEEL'S  ACTION.  455 

even  then  get  better  terms  than  they  deserve."  I  am  not  quoting 
to  you  the  language  or  the  sentiments  of  Cobbett  and  orator  Hunt, 
and  other  misguided  but  honest  men  who  denounced  the  war  and 
the  paper  money,  and  the  funding  system  with  equal  and  with 
impartial  rigour,  but  of  nobles  and  statesmen  in  both  houses. 

Fortunately  for  the  nation  better  counsels  prevailed.  The  service 
which  Peel  did  British  credit  was  almost,  perhaps  quite  as  great 
as  that  which  he  did  when  he  freed  British  trade.  Peel  seems 
to  me  to  have  been  the  greatest  of  Parliamentary  tacticians. 
His  writings,  published  by  Cardwell,  are  almost  childish.  His 
speeches  are  carefully  prepared.  But  his  principal  power  was  in 
debate.  He  was  very  ready,  and  had  that  rare  gift  of  puzzling 
an  opponent  by  timely  questions  and  timely  rejoinders.  Above 
all  things.  Peel  was  transcendently  honest.  He  was  slow  in 
changing  his  opinion,  but  sure  when  he  had  changed  it.  A  Con- 
servative by  instinct,  he  was  the  most  dangerous  of  allies  to  un- 
thinking Conservatism.  In  particular  he  knew  that  all  his  defences 
might  prove  untenable,  and  that  it  was  useless  to  maintain  a 
political  fortress  when  a  battle  was  fought  and  won  in  its  vicinity. 
It  was  this  prescience  about  the  real  worthlessness  of  a  reputed 
safeguard  which  made  him  so  much  stronger  than  the  Whigs, 
whose  position  after  1832  seemed  unassailable. 

I  have  not  time  to  tell  you  of  Price's  absurd  sinking  fund,  which 
took  Pitt  in,  and  increased  the  burdens  which  the  nation  was 
already  bearing,  and  of  the  more  practical  policy  which  has  in 
these  later  days,  and  in  the  hands  of  Peel's  most  capable  pupil, 
done  so  much  to  reduce  the  debt  and  is  within  reasonable  dis- 
tance of  doing  so  much  more.  It  chiefly  consists  in  the 
judicious  creation  of  terminable  annuities,  in  making  the  charge  of 
the  debt  a  fixed  or  nearly  fixed  annual  amount,  and  in  gradually 
lessening  the  principal,  while  it  maintains  the  interest.  For- 
tunately in  finance  there  is  no  party,  at  least  just  now,  and  the 
most  suspicious,  angry,  and  determined  opponents  of  a  living 
statesman's  political  opinions,  bear  testimony  to  his  incompa- 
rable skill  in  dealing  with  national  finance,  and  especially  with 
the  orderly  liquidation  of  the  public  debt. 


XXI. 

THE  THEOBY  OF  MODERN  TAXATION. 

The  financial  situation  in  1688  and  its  difficulties^  contrasted  with 
those  of  1640 — The  two  Bevolutions  compared — Customs  a/nd 
excise — The  analysis  of  taxation — The  land  tax — The  prevalence 
of  smuggling — Walpole^  his  fortunes  and  his  policy — The  wars  of 
the  eighteenth  century,  of  the  Austrian  succession,  and  of  American 
Independence — The  growth  of  debt  and  taxation — The  taxation  of 
inheritances — Mr.  MilVs  theory — The  avoidance  of  legacy  duties 
by  the  rich — The  income  tax  and  its  history — An  income  tax 
intrinsically  unfair — Later  British  finance. 

The  second  English  Eevolution,  as  I  am  accustomed  to  call  the 
events  of  1688,  in  contradistinction  to  the  first,  by  which  I  mean 
the  events  of  1640,  was  from  the  beguining  characterized  by  a  new 
system  of  taxation.  The  new  departure  was,  if  you  will,  inchoate, 
clumsy,  blundering,  experimental.  It  deserves  these  and  perhaps 
stronger  epithets.  But  never  were  a  set  of  men  put  into  a  moEfi 
difficult  position  than  the  financiers  of  WiUiam's  reign  were. 
They  were  entirely  new  to  the  most  difficult  busmess  in  all  finance, 
to  the  perpetual  puzzle  of  all  inventors  of  taxes,  which  is — 1.  What 
will  people  bear  without  resenting  the  action  of  government  ?  2. 
"What  kind  of  tax  is  least  likely  to  cripple  industry  and  derange  trade  ? 
8.  If  taxes,  which  satisfy  people  or  at  least  do  not  dissatisfy  them, 
are  imposed,  what  machinery  can  be  relied  on  for  collecting  them  ? 
Now  at  the  Eevolution  projectors  of  new  taxes  were  swarming. 
The  pamphlets  of  the  age  are  full  of  projects,  submitted  to  the 
finance  minister  and  the  pubHc,  fi'om  which  a  plentiful  revenue  is 


THE  FINANCIAL  SITUATION  IN  1688.  457 

promised,  without  loss  or  inconvenience  to  the  persons  who  are  to 
contribute  the  tax.  It  has  been  my  business,  for  several  reasons,  to 
examine  with  some  minuteness  the  vast  mass  of  pamphlets  in  the 
Bodleian  Library,  and  if  one  could  argue  from  the  multitude  of 
suggestions,  financial  shrewdness  was  at  the  time  a  peculiar  gift  of 
the  English  pubHc.  When  one  examines  the  proposals,  one  is  able  to 
see  whence  Swift  derived  the  truest  and  most  caustic  part  of  the 
comments  which  he  makes  about  the  occupations  of  the  political 
philosophers  of  Laputa. 

The  situation  was  peculiar.  One  part  of  the  finance  of  Crom- 
well, heavy  direct  taxation  of  land,  was  intolerable,  though  it  had 
to  come  in  the  end.  Another  part  of  it,  an  octroi  duty,  paid  under 
the  name  of  excise,  by  every  purchaser,  when  he  bought  articles  of 
necessity  and  convenience,  was  odious  in  the  last  degree,  both  to 
dealer  and  consumer — to  the  former,  because  it  made  him  a  respon- 
sible tax-collector  for  the  government;  to  the  latter,  because  it  made 
the  presence  of  the  government  visible  in  its  least  attractive  and 
conciliatory  function,  in  every  part  of  the  business  of  hfe.  It  was 
no  doubt  a  relief  to  know  that  arbitrary  government  by  king  and 
courtiers  was  at  an  end.  It  was  still  pleasanter  to  find  that 
ecclesiastical  tyranny  was  checked.  But  as  a  rule,  the  victims  of 
arbitrary  government  are  few.  To  the  mass  of  men,  the  high- 
handed violation  of  law  and  order,  under  the  pretence  of  maintain- 
ing law  and  order  is  rarely  visible  ;  for,  in  those  ages  at  least,  the 
government  chastised  those  only  who  professed  to  be  the  leaders  in 
the  popular  cause,  and  did  not  organize  a  system  of  terrorism  against 
the  whole  people.  I  imagine  that  the  Star  Chamber  and  the  High 
Commission  Court  were  more  an  object  of  alarm  and  anger  to  the 
mass  of  those  men  who  met  in  November,  1640,  than  they  were  to 
the  peasants  and  shopkeepers  whom  the  Hampdens  and  Pyms,  the 
Hydes  and  Seldens,  the  Cromwells  and  St.  Johns  represented.  But 
in  all  which  makes  taxation  vexatious  Cromwell's  excise  was  more 
hateful  than  Charles'  ship  money.  Besides,  when  people  get  angry, 
and  call  the  fiscal  system  of  a  country  *♦  oppression,  thraldom, 
and  misery,"  it  matters  little  to  them  that  the  charges  of  which 
they  complain  are  imposed  by  constitutional  authority.  It  is  no 
doubt  a  great  thing  for  a  government  to  shape  its  policy  under  the 
apparent  control  of  a  ParHament,  and  with  its  sanction.    But  men 


458  THE  TEEOBY  OF  MODEBN  TAXATION. 

who  believe  that  they  are  oppressed  by  a  Parliament  will  question  its 
authority,  and  even  say  that  it  has  been  recreant  to  its  indisputable 
duty  and  to  its  admitted  pledges. 

Again,  it  was  perhaps  no  great  boon  to  have  exchanged  the  control 
of  Laud's  bishops  and  other  officials,  the  etcetera  of  the  famous  oaih, 
for  a  prying  vexatious  directory,  engagement,  assembly,  Presby- 
tery, or  whatever  other  engine  of  theological  control  was  evolved 
from  the  Babel  of  sects.  Men  wished  in  some  vague  manner  to  be 
free,  though  they  were  far  from  seeing  that  toleration  or  equality  in 
theological  matters  was  the  only  true  freedom.  But  they  found  that 
they  had  exchanged  the  free  and  easy  parson,  who  did  not  come 
very  willingly  into  Laud's  schemes,  for  a  sour  and  vexatious  fanatic. 
I  do  not  indeed  believe  that  the  Puritan  movement,  except  locally, 
embraced  the  country  folk.  I  cannot  otherwise  account  for  the 
influence  which  the  rural  clergy,  poor  and  low  born  as  most  of  them 
were,  exercised  after  the  Kestoration,  or  for  the  general  popularity  of 
the  Clarendon  code.  It  must,  Ithink,be  plain  that  the  Commonwealth 
contrived  to  destroy  its  own  principal  agent,  the  organization  of  the 
Puritans.  It  might  have  done  this,  and  the  morality  of  the  move- 
ment have  survived.  The  mass  of  the  English  people  took  no 
part  in  the  hideous  orgies  of  the  Kestoration.  But  the  politics  of 
the  first  Eevolution  and  the  politics  of  the  second  were  equally 
aristocratic.  You  will  often  find  in  history  that  a  leader  of  the 
people,  whom  his  enemies  or  rivals  have  been  used  to  call  a  dema- 
gogue, becomes  in  course  of  time  the  advocate  of  aristocratic 
reaction,  perhaps  has  always  supported  it. 

The  first  Eevolution  was  not  menaced  by  foreign  intervention, 
Europe  was,  when  the  contest  began,  entirely  exhausted  by  the 
Thirty  Years'  War.  The  French  king,  who  was  hereafter  to  imper- 
sonate the  spectre  of  universal  empire,  was  a  child,  and  the  policy  of 
Eichelieu  and  Mazarin  was  not  inclined,  either  by  interest  or 
gratitude  to  make  the  cause  of  Charles  its  own.  Few  things,  I 
should  conceive,  would  have  been  more  ridiculous  or  more  offensive 
to  Eichelieu  (for  Louis  XIII.  was  a  nobody  in  French  affairs),  than 
the  absurd  and  useless  assistance  which  Charles  and  Buckingham 
gave  to  Eochelle.  If  he  and  his  successor  entertained,  as  is  the 
custom  of  statesmen,  no  feelings  of  revenge,  on  the  other  hand 
they  could  not  but  keep  alive  the  heartiest  contempt  for  the  eiUy 


TEE  TWO  BEVOLUTIONS  CONTBASTED,  459 

dupe  of  tbe  silly  Villiers.  The  Dutch  democracy,  led  by  the  family 
feeling  of  the  Prince  of  Orange,  showed  some  sympathy  for  the 
royal  cause.  They  harboured  the  murderers  of  Dorislaus,  certain 
obscure  Scotch  loyalists  and  bravos.  They  paid  a  long  penalty  for 
their  superfluous  hospitality.  They  harboured  Charles,  who  repaid 
them  of  course  with  ingratitude  and  perfidy.  After  1672,  one 
would  have  thought  that  every  Dutch  Calvinist,  whom  pre- 
destination had  not  entirely  divested  of  all  forethought,  must 
have  treasured  up  the  Divine  maxim,  **  Put  not  your  trust  in 
princes." 

The  authors  of  the  second  Eevolution  had  a  very  different  state 
of  things  to  contend  against.  The  boy  of  the  first  Eevolution  was 
the  terror  of  the  second.  The  Peace  of  Nimeguen  had  left  Louis 
XIV.  in  a  position  which  was  only  second  to  that  of  Napoleon  after 
the  treaty  of  Tilsit,  and  about  equal  to  that  of  his  nephew  after 
the  Italian  campaign  and  the  cession  of  Nice.  Now  Louis  XIV. 
had  every  reason  to  assist  the  Stuarts  in  their  policy  and  their 
pleasures,  and  thought  no  money  wasted  which  would  secure  them 
in  both.  The  expulsion  of  James  must  have  been  a  severe  disap- 
pointment to  him,  and  the  protection  accorded  to  the  royal  exile  a 
somewhat  hopeless  expense  after  the  Irish  campaign.  In  that 
country  of  long  memories,  Ireland,  Cromwell  is  always  named  with 
dread,  James  with  contempt,  though  I  do  not  think  that  the 
Irish  read  Macaulay.  Now  in  1689  Louis  was  seen  to  be  ruler 
over  a  kingdom  which,  bemg  entirely  under  one  man's  authority, 
was  known  to  be  the  most  populous  state  in  Europe,  and  believed 
to  be  by  far  the  richest.  The  financial  policy  of  Colbert  had 
dazzled  the  nations;  and  the  French,  ie.  the  France  which  lived  on 
the  peasantry,  were  pleased  at  the  effect.  It  was  then  that  prestige, 
which  of  course  you  know  means  a  juggler's  imposture,  began  to 
describe  French  ascendency,  and  to  exercise  a  permanent  influence 
over  French  action.  In  order  to  understand  the  finance  of  the 
Eevolution,  you  must  understand  the  political  situation  of  Europe. 
England  had  one  ally  bound  to  her  to  be  sure  by  the  strongest 
of  ties,  the  sense  of  mutual  danger ;  and,  though  England  was 
in  this  war  and  in  the  next  the  protector  of  Holland,  she 
made  that  unfortunate  country  pay  dearly  in  the  end  for  her 
services. 


460  THE  THEOBY  OF  MODEBN  TAXATION. 

Yon  will  see,  then,  if  I  have  made  my  inferences  plain,  that  even 
if  England  had  possessed  the  most  intelligent  and  venturous  finan- 
ciers in  Europe,  it  would  have  been  difficult  to  raise  a  new  revenue. 
The  old  excise  was  utterly  odious,  and  could  not  be  revived.  There 
was  a  new  excise,  a  tax  levied  on  the  dealer,  which  experience 
showed  to  be  tolerable  only  because  it  chiefly  fell  on  the  working 
classes.  But  it  was  doubtful  as  to  how  far  it  could  be  extended. 
There  was  a  quasi-personal  tax,  dating  from  the  Eestoration,  which 
was  supremely  odious,  the  hearth  money.  That  had  to  go,  though 
not  without  misgivings  at  the  Exchequer.  It  was  not  possible,  so 
it  seemed,  to  renew  a  land  tax  on  the  lines,  or  beyond  the  lines  of 
the  old  temporary  taxes,  or  the  projected  commutation  of  feudal 
dues.  I  say  beyond  the  lines,  for  the  hereditary  excise  did  not 
certainly  yield  a  tenth  part  of  what  was  soon  fornid  to  be  wanted. 
Then  there  were  customs.  But,  as  I  have  often  told  you,  even 
when  the  English  were  expected  to  be  patriotic  and  were  warned 
that  the  supremacy  of  Louis  would  condemn  them  to  a  diet  on  frogs, 
and  the  substitution  of  wooden  shoes  for  leathern,  they  applauded 
the  sentiment  and  traded  with  the  smuggler  of  French  goods.  I  am 
not  surprised.  In  my  experience  of  human  life  I  have  constantly 
witnessed  the  struggle  in  men,  othei*wise  pious  and  honest,  between 
their  conscience  and  their  interest,  and  have  recognized  with  un- 
feigned regret  that  the  latter  has  generally  had  the  better  of  it. 

The  metaphysicians  of  political  economy  often  debate  as  to  the 
grounds  on  which  taxation  is  imposed.  Now  there  is  no  doubt  that 
in  early  days  it  was  argued  by  lawyers  and  divines  that  the  prince, 
like  an  Irish  chieftain  of  the  old  days,  should  spend  his  subjects' 
money  at  his  discretion,  and  defend  them  from  wrong  in  considera- 
tion of  their  contributions.  To  be  sure  he  interpreted,  like  the 
aforesaid  chieftain,  his  own  duties  as  well  as  those  of  his  subjects, 
and  generally  to  his  own  relief,  and  their  disadvantage.  It  was 
ultimately  found,  though  only  after  many  struggles  and  not  a  few 
revolutions,  that  it  was  not  safe  to  trust  the  ruler  and  his  advisers 
with  the  interpretation  of  the  situation.  Then  it  has  been  alleged, 
by  a  dangerous  metaphor,  that  the  state  is  to  be  likened  to  a  vast 
property,  in  which  each  of  the  citizens  or  subjects  has  his  share,  and 
that  as  the  partners,  or  tenants  in  common  of  an  industry  or  an 
estate,  have  received  their  share  of  the  produce,  they  should  be  in 


THE  ANALYSIS  OF  TAXATION.  461 

duty  bound  to  contribute  to  the  expenses  of  management.  But 
unluckily  the  analyst  of  taxation  finds  that,  as  soon  as  the  limits  of 
destitution  are  passed,  those  who  get  relatively  least  pay  most 
relatively  to  the  costs  of  management,  for  taxation  is  not  effective, 
except  it  levies  imposts  on  those  articles  or  those  practices  which 
the  mass  of  the  people  cannot  or  will  not  do  without.  Then,  more 
plausibly,  the  function  of  the  state,  which  has  nothing  of  its  own, 
and  must,  it  is  admitted,  curtail  every  one's  enjoyments  in  order  to 
exist,  performs  a  high  and  necessary  service,  in  which  the  protection 
and  continuity  of  the  working-man's  industry  is  of  no  slight  signifi- 
cance. Taxation,  then,  is  the  payment  rendered  for  service  done. 
The  difficulty  in  this  theory  is,  that  one  is  constantly  invited  to 
criticize  the  reality,  even  the  pretence,  of  the  service,  and  the  people 
in  possession  are  very  apt  to  resent  the  criticism.  Adam  Smith, 
with  his  usual  insight  into  human  nature,  and  the  relation  of  means 
to  ends,  suggests  that  taxation  should  be  merely  relative  to  enjoy- 
ments, i.e. J  should  not  touch  that  which  people  must  spend  in  order 
to  live  and  work.  I  do  not  know  whether  I  have  stated  all  the 
views  which  are  alleged.  If  there  are  more  and  you  ask  me  about 
them  I  will  try  to  explain  them ;  for  though  the  metaphysics  of 
political  economy  are  well-nigh  as  boundless  as  space,  they  are 
generally  quite  as  shallow  as  a  plane  superficies  is. 

The  financiers  of  the  Eevolution,  then,  had  to  find  out  what  taxes 
the  people  would  bear.  Poll  taxes  were  levied,  graduated  accord- 
ing to  the  rank  or  condition  of  life,  and  disappointed  those  who  im- 
posed them  by  the  scantiness  of  the  produce.  They  lasted  for  eight 
years.  A  house  tax  increasing  with  the  number  of  windows  was 
imposed  in  lieu  of  the  hearth  money,  licenses  to  trade  were  granted, 
and  stamp  duties,  again  in  imitation  of  the  Dutch,  were  imposed  on 
legal  documents.  Duties  were  levied  on  goods  coming  from  the 
East  Indies  and  China,  and  from  some  European  articles.  There 
was  the  impost  of  1690,  of  1692,  the  new  duty  of  1695,  the  French 
duty  of  1696,  and  the  new  subsidy  of  customs  in  the  same  year. 
The  excise  on  beer  was  increased,  an  excise  on  spirits  imposed,  and 
another  very  heavy  one  imposed  on  salt.  Not  to  weary  you  with 
details,  I  may  state  that  the  finance  was  always  experimental,  and 
constantly  had  to  be  abandoned,  because  it  proved  disastrous  to 
industry. 


462  THE  TEEOBY  OF  MODEBN  TAXATION. 

The  resolution  to  which  Parliament  came  soon  after  the  Kevolu- 
tion,  that  it  alone  was  capable  of  granting  a  charter  which  could 
confer  a  trade  monopoly,  a  resolution  which  the  quarrels  of  the 
two  Houses  over  the  privileges  of  the  East  India  Company  had 
accentuated,  led  to  a  new  and  most  timely  financial  operation. 
Two  great  companies  under  this  new  doctrine  were  created  in  the 
reign  of  William  III.,  the  Bank  of  England  and  the  New  East 
India  Company.  The  payment  made  to  the  Crown,  or  rather  the 
Revenue,  for  those  privileges  seems  small  to  our  modem  experience, 
but  the  sum  of  £3,200,000  which  these  two  companies  paid  for  their 
privilege  was  an  exceedingly  important  item  in  the  finance  of  the 
period — not  less  than  a  sixth  of  the  war  expenditure  from  William's 
accession  to  the  peace  of  Ryswick.  Still  more  important,  in  the 
case  of  the  Bank  of  England  was  the  fact,  that  in  creating  this 
corporation,  Parhament  created  si  great  financial  agent  whose 
existence  was  bound  up,  or  supposed  to  be  bound  up,  with  the  Act  of 
Settlement,  and,  more  to  the  purpose,  was  found  to  be  the  safe  and 
trustworthy  Instrument  by  which,  in  succeeding  wars,  loans  could 
be  negotiated,  public  credit  could  be  established  on  a  secure  basis, 
and  a  reduction,  as  I  told  you  in  my  last  lecture,  in  the  rate  of 
interest  payable  on  public  securities  could  be  effected,  during  the 
long  and  pacific  administration  of  Walpole. 

The  land  tax,  that  most  distasteful  of  Cromwell's  expedients  to 
the  landowners,  was  reimposed  in  1692.  After  a  struggle  with  the 
Commons  in  which  the  Upper  House  strove  to  s^ecure  some  advan- 
tages to  their  own  order,  the  Lords  yielded.  The  system  began 
With  a  monthly  assessment,  strictly  in  the  nature  of  a  property  tax. 
In  1692  it  was  assessed  at  4s.  in  the  £,  and  the  assessors  took  no 
oath.  In  1693  they  took  an  oath,  and  the  produce  of  the  tax  was 
less,  a  practical  illustration  of  how  little  value  promissory  oaths  are. 
After  various  expedients  had  been  tried  for  making  the  tax  more 
fruitful,  Parliament,  in  1697,  fixed  the  amount  which  should  be 
raised,  and  distributed  over  counties  and  towns  acco.diMg  to  an 
unalterable  valuation.  In  theory,  no  doubt,  the  land  tax  of  1697 
was  assumed  to  be  collected  from  personal  property  as  well  as 
from  houses  and  land.  In  practice  it  came  to  be  a  tax  on  real 
estate,  unchangeable  not  only  in  the  amount  collected,  but  in  the 
amount  assessed,  and  thus  after  so  long  an  interval  from  the  first 


THE  LAND  TAX.  468 

assessment  it  became  exceedingly  unequal.  The  remission  of  the 
tax  on  personal  property  became  inevitable,  for  personal  property 
is  essentially  shifting.  The  representative  of  real  estate  is  always 
present  or  at  least  discoverable.  The  representative  of  personal 
estate  in  1697,  or  of  his  representative  or  alienee  a  century  later, 
is  not  discoverable,  and  to  transfer  a  fixed  tax  to  one  who  has  no 
relations  whatever  with  the  person  who  was  originally  rated,  was 
out  of  the  question. 

Two  centuries  ago,  land  or  the  rent  of  land,  which  had  risen 
without  effort  on  the  part  oi  the  owner  some  twelve  times  in  the 
course  of  the  seventeenth  century,  was  deemed  to  be  a  peculiarly  fit 
subject  for  taxation.  In  the  first  place,  it  had  escaped,  by  a  Parlia- 
mentary Act  from  its  hereditary  liabilities ;  in  the  next  place,  these 
rents,  as  far  as  legislation  could  effect  this  result,  had  been 
peculiarly  favoured  by  Parliament;  in  the  third,  it  was  supposed  to 
be  specially  bound  to  the  new  settlement ;  in  the  fourth,  a  tax  on  it 
formed,  in  the  necessities  of  the  state,  the  only  escape  from  a 
particularly  vexatious  excise,  or  a  capricious,  nugatory,  or  oppres- 
sive customs  duty.  The  land  tax  was  beyond  doubt  a  very  dis- 
agreeable impost.  With  an  improving  agriculture  and  with 
increasing  rents,  it  was  resented  in  the  eighteenth  century  by  the 
country  party.  But  the  Seven  Years'  War  and  the  War  of  American 
Independence  rendered  its  permanent  imposition  at  the  highest 
rate,  but  on  the  old  assessment,  inevitable ;  and  in  1798,  Pitt,  in 
order  to  carry  out  a  financial  operation,  during  a  time  of  singular 
financial  difficulty,  made  the  land  tax  a  perpetual,  but  redeemable 
charge. 

The  war  of  the  Spanish  succession  cost  the  British  nation  (for 
in  1707  the  Scottish  Parliamentary  Union  was  carried  out)  more 
than  50  millions,  of  which  3-7ths  was  raised  by  loans.  But  by 
this  time  the  British  financier  found  that  the  country  was  gradually 
being  accustomed  to  excises  and  customs,  and  that  the  system 
could  be  extended.  It  also  became  the  practice  to  grant  these 
customs  and  excises  for  far  longer  times  than  was  originally  thought 
prudent,  and  for  the  obvious  reason  that,  in  this  manner,  greater 
security  would  be  given  to  the  loans  which  were  raised,  and  the 
loans  themselves  could  be  procured  on  easier  terms.  This  war 
too  saw  the  beginning  of  those  more  modem  treaties  of  commerce, 


464  THE  THEOBY  OF  MODEBN  TAXATION, 

in  which  the  fiscal  policy  of  the  country  was  made  to  do  service  on 
behalf  of  the  sole-market  theory.  The  Methuen  treaty  with  Portugal 
was  the  type  of  that  economical  diplomacy  which  was  criticized 
adversely  by  Adam  Smith.  As  yet,  however,  the  taxation  was  of 
cheap  luxuries,  cheap  because  neither  excise  nor  customs  make  a 
substantial  revenue,  unless  they  attack  the  consumption  of  the 
poor.  The  duties  on  foreign  corn  existed  practically  on  paper 
only,  for  the  new  agriculture  and  the  almost  unbroken  abundance 
of  the  seasons,  never  paralleled  except  in  the  fifteenth  century, 
rendered  the  Com  Laws  of  the  Eestoration  only  a  contingent  terror. 
The  war  of  the  Spanish  succession  led  to  several  enduring  taxes. 
Thus  taxes  were  put  on  hops,  in  this  case  imposed  on  the  cultivator, 
on  soap,  on  paper,  on  printed  goods,  and  on  newspapers,  besides 
one  on  advertisements.  The  tax  on  newspapers  was  collected  by 
stamps.  Now  the  taxes  which  I  have  enumerated  were  continued 
up  to  living  memory.  It  was  conceived,  perhaps  with  some  reason, 
that  the  newspaper  tax  was  in  effect  a  licensing  Act.  But,  on  the 
whole,  the  cause  of  the  Tory  party  of  that  time  was  better  served 
by  men  of  letters  than  that  of  the  Whigs.  Swift,  St.  John,  and 
Prior  are  more  vigorous  political  writers  than  those  on  the  opposite 
side.  Defoe,  it  appears,  was  ready  to  take  a  brief  from  either  of  the 
contending  factions.  He  had  accepted  as  his  guide  in  literary 
life  the  adage  of  Vespasian,  No7i  olet. 

The  smuggler  always  avenges  foolish  and  unfair  customs  duties. 
Experience  has  proved  that  nations  will  endure  heavy  taxation, 
if  it  be  equitable,  and  not  imposed  to  subserve  personal  interests 
or  political  whims.  The  English  people  reluctantly  substituted 
port  for  claret,  Geneva  or  colonial  rum  for  French  brandy,  for  in 
the  southern  part  of  the  island  at  least,  they  submitted  to  taxes 
which  wore  intended  to  weaken  the  hereditary  enmity  of  France 
and  secure  a  balance  of  trade.  But  the  case  was  different  in  certain 
other  articles.  The  taste  for  tobacco  and  tea  was  rapidly  growing, 
and  it  is  said  that  owing  to  the  excessive  duties  levied  on  these 
articles,  the  taxes  on  them  were  unproductive ;  the  ordinary  trader, 
finding  it  impossible  to  compete  against  the  smuggler,  in  the  end 
entering  into  regular  business  relations  with  him.  In  the  arithmetic 
of  the  customs,  said  Swift,  two  and  two  do  not  always  make  four. 
It  has  been  constantly  alleged  that  a  reduction  of  duties  is  the 


THE  PREVALENCE  OF  SMUGGLING.  465 

remedy  for  the  smuggler.  But  in  our  time,  when  smuggling  haa 
ceased  to  be  a  calling,  and  has  become  merely  an  occasional  private 
fraud,  heavy  enough  duties  are  levied  on  certain  goods  of  foreign 
origin.  But  they  are  not  discriminating  or  protective,  and  there- 
fore do  not  deaden  the  moral  sense  of  the  consumer.  It  is,  I 
believe,  to  the  adoption  of  free  trade,  and  the  levy  of  revenue 
duties,  excises  and  customs  for  revenue  only,  that  we  must  assign 
the  extinction  of  the  professional  smuggler.  The  case  is  still 
different  in  protection-ridden  countries.  The  present  tendency 
in  Canada  towards  a  Zoll-verein  with  the  United  States  is  the 
impossibility  of  maintaining  a  preventive  staff  along  a  geometrical 
frontier.  I  do  not  predict  confidently  that  the  result  of  such  a 
tariff  will  be  the  annexation  of  Canada  to  the  United  States  as 
Mr.  Chamberlain  with  much  show  of  reason  foresees.  But  I  am 
well  advised  that  the  present  state  of  things  is  intolerable,  that  it 
has  been  developed  from  causes  which  might  have  been  prevented, 
that  these  causes  have  been  fostered  by  incompetent  advisers  of 
the  Crown  at  the  Colonial  Office,  and  that  it  is  by  no  means  clear 
that  in  the  existing  state  of  affairs  remedial  measures  are  possible. 
"  Walpole,"  says  his  biographer  and  eulogist,  Archdeacon  Coxe, 
"  found  the  British  tariff  the  worst  in  the  world,  and  left  it  the 
best."  Mr.  Coxe,  like  most  biographers,  errs  on  the  side  of 
excessive  praise.  It  may  be  doubted  whether  a  biography  does 
its  object  any  lasting  service  with  posterity.  No  one  can  be 
expected  to  feel  the  same  interest  in  a  subject  which  the  author 
does,  and  when  the  subject  is  a  fellow-creature,  we  take  up  the 
narrative  with  a  natural  suspicion  that  the  portrait  will  be  over- 
charged with  brilliant  colour.  But  Walpole  was  a  man  of  great 
Parliamentary  tact.  One  of  his  earliest  exploits  was  in  1702. 
The  Tories  had  determined  on  recovering  those  parts  of  the  Crown 
estate  which  had  been  granted  to  William's  friends,  and  they 
were  strong  enough  to  carry  their  Bill.  Walpole  affected  to  agree 
with  them,  but  proposed  to  carry  the  resumption  back  to  the 
Restoration.  Now  even  to  the  most  inveterate  party  spirit,  the 
services  of  Somers  and  Montague,  and  even  of  Bentinck  and 
Keppel,  though  they  might  be  over-rewarded,  were  considerable. 
But  it  was  not  easy  to  discover  the  services  which  had  been  done 
by  the  dukes  of  the  creation  of  Charles — of  Grafton,  St.  Albans, 

81 


466  THE  THEORY  OF  MODEBN  TAXATION. 

Richmond,  and  the  rest.  The  situation  was  too  ludicrous,  and  the 
Bill  was  dropped.  Fortunately  for  his  reputation,  Walpole  was 
out  of  office  at  the  time  of  the  South  Sea  Bubble,  though  it  is  said 
that  he  materially  improved  his  fortunes  by  judicious  purchases 
and  sales  of  that  notorious  stock.  He  was  certainly  of  consider- 
able use  in  rescuing  public  credit  from  the  consequences  of  that 
gigantic  swindle,  in  which  indeed,  too  many  of  the  government 
were  compromised. 

"Walpole  made  a  great  fortune  in  the  public  service.  So  had 
Osborne,  whom  we  know  as  the  Duke  of  Leeds,  and  Churchill, 
whom  we  know  as  the  Duke  of  Marlborough,  to  say  nothing  of  a 
dozen  others.  This  has  latterly,  I  see,  been  made  a  reproach 
against  him,  and  it  appears  that  one  of  his  descendants  is  sensitive 
on  this  score.  Walpole  would  have  laughed  heartily  at  his  future 
critics  had  he  foreseen  the  charge.  *'  Of  course,"  he  would  have 
said;  "but  when  a  man  undertakes  public  business,  he  intends 
to  better  his  fortunes.  Why,  do  you  think,  do  the  honest  gentlemen 
who  are  about  me  come  into  this  House,  and  pay  solid  cash  for 
getting  here  ?  It  is  sufficient  if  a  public  man  does  honest  service 
to  the  nation,  and  takes  a  moderate  commission  on  the  function 
which  he  performs."  I  do  not  doubt  that  Shippon  spoke  the 
popular  sentiment  when  he  said,  *•  Robin  and  I  are  two  honest 
men ;  but  he  is  for  Kmg  George,  and  I  am  for  King  James."  Now 
Shippon  had  taken  the  oaths  of  allegiance  and  I  know  not  what 
to  King  George.  But  he  did  not  think  his  integrity  compromised 
when  he  intrigued  with  the  exiled  family,  though  he  sat  in 
Parliament  under  the  condition  of  recognizing  to  the  full  the 
house  of  Hanover.  Promissory  oaths  are  never  worth  much,  but 
in  the  first  haK  of  the  eighteenth  century,  they  were  worse  than 
worthless. 

Walpole  determined  on  reforming  the  tariff  in  such  a  way  as  to 
liberate  industry  from  customs  duties  on  materials,  and  by  per- 
mitting drawbacks  on  duty-paying  goods  exported.  He  repealed 
certain  taxes  which  grievously  discouraged  maritime  enterprise. 
He  permitted,  with  a  few  exceptions,  the  free  exportation  of  articles 
produced  or  manufactured  in  Great  Britain,  thus  striking  off  most 
of  the  export  duties.  He  contemplated  a  revision  of  the  land  tax, 
about  which  the  country  gentlemen  constantly  complained.     But 


WALPOLE'S  POLICY.  467 

these  honest  people  dreaded  a  reassessment  still  more,  particularly 
those  in  the  west  and  the  north,  where,  according  to  ancient 
tradition,  the  tax  was  particularly  light.  So  he  had  to  drop  his 
scheme,  as  far  as  the  land  tax  was  concerned,  and  soon  afterwards 
another  reform  which  he  contemplated. 

This  was  the  establishment  of  bonded  warehouses  for  duty- 
paying  goods.  In  1711,  importers  of  tea  and  coffee  were  permitted 
to  warehouse  their  imports.  In  1723,  Walpole  made  the  process 
compulsory  in  these  articles,  and  found  that  he  checked  smugghng 
by  it.  In  1733  he  proposed  to  extend  the  system  to  wine  and 
tobacco,  and  to  levy  the  duties  under  the  name  of  excises  at  the 
time  when  they  were  taken  out  of  bond  for  consumption.  The 
great  dealers  saw  rivalry  to  themselves  in  this  scheme.  Walpole's 
enemies,  and  he  had  been  so  long  in  office  that  disappointment  had 
made  him  many  enemies,  raised  up  the  cry  that  the  Cromwellian 
excise  was  to  be  restored,  and  the  people  were  informed  that  this 
was  the  beginning  of  a  system  under  which  everything  would  be 
taxed  inquisitorially.  So  there  were  numerous  petitions,  and  mobs 
in  the  Court  of  Bequests.  In  the  end  Walpole  withdrew  his  Bill 
and  the  country  was  pacified.  Perhaps  some  of  the  opponents  of 
the  projected  measure  were  not  so  anxious  to  extinguish  the 
smuggler  as  Walpole  was.  This  prudent  retreat  kept  him  nine 
years  longer  in  office. 

In  1739  a  war  with  Spain  was  undertaken,  ostensibly  in  order  to 
avenge  the  wrongs  which  had  been  perpetrated  on  British  merchants 
and  sailors,  in  defiance  of  the  Assiento  treaty,  really  because  it  was 
believed  that  the  Spanish  colonies  were  conveniently  situated  for 
plunder.  You  have  no  doubt  heard  the  story  of  Jenkins'  ears. 
Simultaneous  with  this  was  the  war  of  the  Austrian  succession,  and 
the  early  aggrandisement  of  Prussia.  This  war  involved  a  quarrel 
with  France,  and  a  quarrel  with  France  another  and  a  last  expedition 
in  favour  of  the  Stuarts.  The  war  ended  with  the  peace  of  Aix-la- 
Chapelle  in  1748.  The  costs  of  this  war  were  met  by  increasing 
the  customs  and  excise,  by  revising  the  house  tax,  and  by  levying  a 
tax  on  private  carriages.  In  consideration  of  the  burden  laid  on 
articles  of  domestic  manufacture,  heavy  customs  were  imposed  oh 
identical  foreign  goods,  and  the  country  became  Protectionist 
without  knowmg  it.     It  is  true  that  even  at  that  time  there  were 


468  THE  THEOBY  OF  MODERN  TAXATION. 

people,  like  Henry  Fox,  who  saw  that  it  would  be  well  for  England 
if  the  country  could  be  made  a  free  port ;  but  to  effect  this  it  would 
be  necessary  to  raise  the  necessary  funds  by  a  property  tax  on  a 
just  system  of  assessment,  or  to  levy  a  searching  excise  on  internal 
consumption.  The  landowners  would  not  endure  the  former,  and 
the  mass  of  the  people  rebelled  against  the  latter.  Additional 
customs  was  therefore  the  only  remedy.  Fox  calculated  that  in  his 
day  a  bona  fide  land  tax  would  have  yielded,  at  4s.  in  the  £,  at  least 
four,  possibly  five,  millions. 

Peace  only  lasted  for  eight  years,  when  the  Seven  Years'  "War  was 
undertaken  in  1756.  The  economical  consequences  of  this  war,  the 
effect  of  which  was  to  secure  to  Great  Britain  a  sole  market  as 
vast  and  to  all  appearances  immeasurably  more  valuable  than  the 
territories  bestowed  by  Borgia  on  Spain  and  Portugal  by  his  cele- 
brated Bulls,  have  been  treated  of  in  a  previous  lecture.  But  it  cost 
eighty-two  and  a  half  millions,  and  of  this  sum  sixty  were  in  the 
form  of  an  addition  to  the  public  debt.  The  new  taxes  are  on  the 
possession  of  plate,  on  cards  and  dice,  and  a  license  duty  on 
publicans.  Further  duties,  intended  as  far  as  possible  to  fall  on 
consumption,  were  imposed,  and  an  additional  5  per  cent,  ad- 
valorem  was  put  on  articles  paying  customs  duties.  The  most 
important  additions,  however,  were  those  made  on  malt,  beer,  and 
spirits.  They  were  borne,  but  the  imposition  of  a  tax  on  cider 
and  perry  very  nearly  caused  a  rebellion.  It  was  believed  that 
Parliament  had  exhausted  the  possible  subjects  of  taxation,  and 
even  the  patience  of  the  nation.  So  completely  bewildered  were 
the  ministry  which  came  into  office  at  the  peace  of  Paris,  and  so 
desperate  seemed  the  condition  of  British  finance,  that  Grenville 
determined  on  taxing  the  Colonies  by  the  authority  of  Parliament. 
There  seemed  to  be  this  reason  in  it,  that  the  Seven  Years'  War  had 
left  the  British  settlers  the  undisputed  masters  of  the  best  regions 
of  North  America.  They  had,  to  be  sure,  contributed  liberally  to  the 
expenses  of  the  war,  and  had  incurred  considerable  debts  for  the 
same  object.  But  by  freeing  them  from  all  risk  on  the  part  of 
France,  the  only  power  of  which  they  now  had  any  dread  was  Great 
Britain. 

The  colonists  affecfed  to  believe  and  with  reason  that  the  lan- 
guage of  Grenville's  Act  implied  an  indefinite  power  in  the  hands 


THE  WAB  OF  AMEBIC  AN  INDEPENDENCE.  469 

of  Parliament  of  taxing  the  plantations  for  Imperial  purposes.  At 
the  same  time,  they  did  not  offer  an  unqualified  opposition  to 
Grenville's  scheme.  They  agreed  to  certain  customs  duties  on 
imports  and  exports.  They  had,  as  a  matter  of  fact,  acquiesced  in 
the  colonial  system,  which,  by  regulating  their  trade,  regulated 
their  port  dues.  It  was  to  the  Stamp  Act  that  they  made  a 
stubborn,  and  in  the  end  successful,  resistance.  The  British  Parlia- 
ment offered  no  opposition  to  Grenville's  Stamp  Act  in  either  house, 
and  yet  perhaps  no  more  momentous  and  enduring  fact  has  ever 
occurred  in  history  than  the  Stamp  Act.  It  is  the  least  part  of  it 
that  it  led  to  the  revolt  of  the  Colonies.  It  did  much  more — it 
stereotyped  the  fiscal  independence  of  every  British  settlement,  it 
settled  the  principle  that  taxation  cannot  be  imposed  without 
representation,  and  by  a  forced  construction  put  on  the  facts,  it 
permitted  the  colonist  to  levy  Protectionist  duties  against  the  home 
government,  and  yet  to  embroil  that  very  government,  apart  from 
any  act  of  its  own,  in  any  local  and  political  war  in  which  the 
colony  might  think  it  proper  or  profitable  to  engage.  The  political 
consequences  of  this  precedent  no  one  can  confidently  predict :  the 
economical  consequences  are  disastrous  enough  to  the  colonists  who 
have  voluntarily  experienced  them.  The  Stamp  Act,  which  did  not 
pay  for  the  cost  of  collection,  was  repealed  in  1766,  though  in 
repealing  it  Parliament  was  induced  to  assert  that  what  it  had  done 
was  within  its  right.  The  Colonies  now  went  a  step  further,  and 
denied  the  right  of  ParHament  to  impose  any  tax  whatever  on  the 
Colonies,  whether  internal  or  at  the  ports.  The  duty  on  tea, 
calculated  to  yield  £30,000  a  year,  was  retained  in  the  Cabinet  by  a 
single  vote,  that  of  Lord  North. 

I  shall  not  weary  you  by  dealing  with  the  events  of  the  War  of 
Independence,  except  in  so  far  as  they  bear  on  the  extension  of  the 
British  fiscal  system.  The  greater  part  of  the  costs  incurred  by 
this  war  was  met  by  loans.  The  greater  part  of  the  taxes  imposed 
was  on  consumption.  Now  there  is  no  doubt  that  wealth  increased 
greatly  during  this  war.  But  there  is  no  doubt  also  that  the  con- 
dition of  the  working  classes  was  rapidly  becoming  deteriorated. 
The  old  days  of  plentiful  harvests  and  low  prices  were  over,  or 
perhaps  the  growth  of  population,  doubled  in  the  eighteenth 
century,  assisted  in  producing  by  the  aid  of  the  Com  Laws  the 


470  THE  THEOBY  OF  MODEBN  TAXATION. 

terrible  scarcity  prices  which  were  at  hand.  In  1782,  the  National 
Debt  had  grown  from  126  milHons  to  230.  In  order  to  be  effectually 
discontented,  a  people  must  be  prosperous  :  when  misery  revolts,  it 
strikes  blindly  and  is  generally  restrained. 

In  1783  the  younger  Pitt  came  into  office,  and  in  1784  obtained 
a  pliant  Parhament ;  how  obtained  will  not  probably  be  known  for 
sometime  to  come,  there  being  a  tradition  that  the  secret  materials 
of  history  are  kept  back  in  this  country  for  more  than  a  century,  a 
pretty  clear  indication  how  discreditable  those  secret  materials  are. 
Pitt's  taxes  were  the  very  worst  conceivable,  nearly  all  on  con- 
sumption, on  trade,  and  on  manufactures.  It  is  paraded  of  this 
personage  that  he  was  a  disciple  of  Adam  Smith.  There  have 
been  many  disciples,  from  Gehazi  and  Judas  onwards,  who  have 
misused  the  instruction  which  they  have  received.  Pitt's  finance 
was  a  disastrous  reversal  of  Adam  Smith's  maxims,  even  during 
nine  years  of  peace.  It  was  to  become  worse  and  worse  during  the 
twenty-two  years  of  the  war  into  which  he  plmiged  the  country. 

The  great  Continental  War,  in  which  the  early  endeavours  of  the 
continental  governments  were  made  to  repress  the  movement  known 
as  the  French  Revolution,  led  to  atrocious  excesses  in  France  itself, 
the  mere  outcome  of  blmd  and  desperate  fear,  to  a  military  enthu- 
siasm which  overran  nearly  the  whole  of  Europe,  and  added  622 
millions  to  a  debt  which  at  the  commencement  of  the  war  was  237^ 
millions.  Left  to  itself  the  Revolution  would  have  burnt  out.  It 
might  have  been  followed  by  a  republic  on  the  model  of  the  United 
States,  though  this  is  unlikely,  because  Federalism  was  a  dangerous 
tenet  in  the  early  days  of  the  Revolution  ;  or  it  might  have  even- 
tuated in  a  limited  monarchy.  The  action  of  Europe  gave  occasion 
to  a  military  despotism  of  singular  destructiveness.  In  one  sense, 
the  Continental  War  was  like  the  Thirty  Years'  War.  It  left  the 
combatants  in  a  state  of  absolute  exhaustion,  an  exhaustion  so 
complete  that  it  took  a  generation  before  they  could  begin  to  recover 
from  the  waste  of  war.  A  war  may  be  very  bloody  and  very 
destructive.  If  the  combatants  are  not  exhausted  it  will  be  followed 
by  a  great  stimulus  to  the  trade  of  neutrals.  No  better  test  can  be 
found  of  the  financial  position  of  a  country  at  the  close  of  a  war, 
be  it  long  or  short,  than  the  fact  that  the  wearied  and  penniless 
combatants  cannot,  after  the  struggle  is  over,  go  into  the  markets 


TEE  TAXATION  OF  INEEBITANCE.  47X 

of  the  world  with  money  or  credit.  The  latest  illustration  of  this 
position  is  the  condition  of  Russia  and  Turkey  after  their  latest 
struggle.  Poverty  may  not  prevent  war,  but  it  is  a  terrible  restraint 
on  recovery  fi-om  war. 

One  of  Pitt's  taxes  (1795)  was  that  on  successions.  He  intended 
to  impose  it  on  all  kinds  of  property,  real  or  personal,  descending  to 
collaterals.  It  was  a  Dutch  tax,  and  the  Dutch  had  borrowed  it, 
according  to  their  own  interpretation,  from  the  5  per  cent,  duty, 
vicesima  hereditatiim  of  the  fiscal  system  established  in  the  Roman 
Empire.  It  is  said  that  he  intended  originally  to  include  these 
charges  on  inheritance  in  a  single  Bill.  If  so  he  changed  his  mind, 
for  he  brought  in  two  Bills — one  referring  to  the  succession  of 
personality,  very  often  a  merely  arbitrary  and  technical  class  of 
property ;  the  other  to  the  succession  of  realty,  a  class  similarly  quite 
as  incapable  of  a  rational  distinction.  He  passed  the  first,  he 
failed  to  pass  the  second ;  for  the  country  party  threatened  to  desert 
the  heaven-born  minister  at  the  crisis.  He  probably  knew  before- 
hand that  they  would,  and  hoped  to  obtain  the  acquiescence  of  the 
possessors  of  personal  property  by  showing  that  while  they  were 
content  to  make  sacrifices  to  save  the  tempest-driven  ship,  the  land- 
owners would  have  let  the  ship  sink,  rather  than  make  any  personal 
sacrifice.  At  this  time,  I  should  mention  that  rents  were  rapidly 
rising.  But  the  landed  interest  had  an  excellent  reason  in  resisting 
the  proposal. 

A  tax  on  inheritance  has  always  been  defended  by  metaphysical 
economists.  "The  recipient  of  an  inheritance,"  they  allege, 
**  cannot  be  said  to  possess  any  rights  to  that  which  he  acquires. 
It  is  property  gained  by  the  industry  or  good  fortune  of  another. 
By  the  death  of  its  possessor,  who  has  now  ceased  to  have  any 
rights  among  the  living,  it  is  derelict,  abandoned,  and  virtually  the 
property  of  society.  By  a  leniency,  perhaps  a  culpable  leniency, 
human  societies  have  generally  permitted  the  lineal  descendants  of 
the  deceased  person  to  enter  on  a  possession  which  is  not  de  jure 
theirs.  The  state  is  entirely  justified  in  taking  a  heavy  toll  on  that 
which  it  permits  to  pass.  Strictly  the  child  of  a  deceased  ancestor 
has  not  a  higher  right  in  his  inheritance  than  that  which  public 
opinion  would  assign  as  the  necessary  maintenance  of  the  same 
person's  illegitimate  offspring."     I  am  not  consciously  parodying 


472  THE  THEORY  OF  MODEBN  TAXATION. 

Mr.  Mill's  argument  while  I  am  condensing  it.  My  late  friend, 
however,  admits  the  vahdity  or  sacredness  of  testamentary  disposi- 
tions. Strictly  speaking,  then,  a  person  who  does  not  or  cannot 
make  a  will  (for  accidents  happen  to  the  most  thoughtful  and 
anxious)  should  be  constrained  to  leave,  beyond  the  provision 
mentioned  above,  of  a  few  shillings  a  week,  his  children  penniless ; 
while  another,  who  is  able  or  prudent  enough  to  make  a  testamen- 
tary disposition,  shall  be  entitled  to  an  authoritative  voice  at  his 
own  death.  This  reasoning  seems  to  me  very  like  punishing  one 
person  for  another's  negligence  or  ill-fortune.  Mr.  Ricardo,  on  the 
other  hand,  objected  to  legacy  duties  altogether,  on  the  ground  that 
the  tax  hindered  the  accumulation  of  capital,  as  though  any  tax 
did  not  hinder  the  accumulation  of  capital,  and  the  argument  could 
not  be  alleged  for  domg  away  with  taxation  altogether. 

It  is,  I  presume,  grrmane  to  the  economist  to  discuss,  and  if  pos- 
sible to  discover,  the  reasons  why  people  save.  Now  the  earliest  and 
most  enduring  motive  for  saving  is  a  sense  of  the  insecurity  of 
fortune  or  health,  of  the  risks  of  social  hfe,  and  the  risks  of  con- 
tinuous activity.  A  second  and  wholly  subordinate  motive  is  the 
expectation  of  profit.  In  some  morbid  or  exceptional  minds,  the 
love  of  power  which  wealth  confers  may  act  as  a  stimulus,  but  this 
remotely  or  rarely.  Now  every  one,  even  the  most  arid  economist, 
allows  that  the  habit  of  saving  is  directly  and  indirectly  a  benefit  to 
society,  and  that  it  should  not  be  discouraged.  I  conclude  also  that 
it  will  be  conceded  that  it  is  not  illaudable  on  the  part  of  a  parent 
to  strive  that  a  child  should  not  sink  to  a  lower  position  than  that 
in  which  he  was  bom  and  educated,  that  such  a  child  should  not, 
on  the  premature  death  of  a  well-to-do  parent,  decline  to  the  few 
shillings  a  week  condition.  Public  opinion  would  censure  a  father 
who,  having  a  considerable  life  interest  only,  made  no  adequate 
provision  for  his  offspring.  A  parent  may  therefore  be  well  excused 
in  devising  his  property  to  his  child ;  the  state  would  be  severely 
condemned  if  it  confiscated  this  natural  provision,  in  case  the 
parent  had  failed  to  make  a  will,  and  in  my  opinion  is  to  be  blamed 
for  giving  such  effect  to  a  parent's  will  as  shields  the  child  from  the 
consequences  of  its  own  misconduct. 

A  man  must  be  a  very  sturdy  patriot  if  he  will  save  as  energeti- 
cally for  the  state  as  he  will  for  his  children,  and  in  a  minor  degree 


MB.  MILUS  THEOBY.  478 

for  his  kindred.  If  the  state  discouraged  saving  by  taking  an  over 
heavy  toll  on  inheritances,  I  conclude  that  the  worst  forms  of  un- 
productive consumption  would  be  increasingly  exhibited.  At  present 
they  are  reprobated.  That  action  of  the  state  would  commend 
them.  It  is  found  impossible  to  forbid  these  forms  of  waste,  ex- 
cept when  they  are  entirely  noxious,  but  I  should  think  that  the 
possessor  of  wealth  would  prefer  his  own  waste  to  the  waste  of  the 
state,  and  the  disposition  of  what  he  has  saved  for  his  own  wants, 
real  or  artificial,  to  the  involuntary  disposition  of  his  property  by 
the  central  authority.  I  do  not  dwell  on  the  moral  question,  of 
how  important  it  is  for  the  state  to  encourage  family  duty,  and  an 
adequate  provision  for  one's  own,  though  I  could  conceive  no  more 
mortal  wound  being  given  to  parental  feeling,  than  the  instruction 
affopded  to  parents,  by  the  utterance  of  the  law,  that  the  moral 
obligations  of  parents  to  children  is,  by  political  ethics,  Hmited  to 
the  few  shillings  a  week  awarded  by  a  bench  of  magistrates  for  the 
maintenance  of  an  illegitimate  child.  But  when  political  economy 
becomes  metaphysical,  it  may  lead  one  on  to  anything. 

There  is  an  objection  to  the  taxation  of  the  inheritance  of 
personal  property  of  a  very  serious  kind.  It  is  that  it  is  one  law  for 
the  rich  and  another  for  the  poor ;  the  inveterate  and  inexcusable 
vice  of  levying  a  tax  which  wealthy  men  may  evade  and  poorer  men 
must  submit  to.  It  is  easy  for  a  man  with  a  large  amount  of 
personal  property  to  make  a  donatio  inter  vivos.  It  is  a  very 
common  thing  for  him  to  do  so.  I  have  known  good  men,  who 
would  not  consciously  defraud  any  one,  who  have  told  me  that  they 
have  provided  largely  for  their  children  during  their  Hfetime  out  of 
their  abundance  ;  and  when  I  have  rejoined,  **  Then  you  avoid  the 
probate  and  legacy  duties  ?  "  they  answer  with  the  full  conviction 
that  the  reply  is  complete,  "  But  the  law  allows  me  to  do  so."  But 
I  hold  that  what  the  law  does  not  aUow  you  or  me  to  do,  but 
allows  a  richer  man  than  you  or  me  to  do,  is  a  privilegium  and 
ipso  facto  to  be  condemned.  Most  of  us,  unlike  King  Lear,  cannot 
give  everything,  for  as  we  get  older,  the  first  and  fundamental 
motive  for  saving  becomes  more  apparent  to  us.  Now  I  do  not  doubt 
that  the  landowners  in  Pitt's  time  foresaw  this  advantage  of  the 
rich  owners  of  personal  property.  Their  lands  were  visible ;  under 
settlements   and  entails,  inahenable.      They  would  certainly  be 


474  THE  THEOBY  OF  MODEBN  TAXATION, 

caught,  and  the  net  was  spread  in  vain  in  sight  of  the  bird.  They 
were  told  what  would  happen.  One  of  the  peers,  who  had  accumu- 
lated a  large  personal  estate  in  the  exercise  of  a  profession  which 
produces  peers  regularly,  declared  that  he  would  never  pay  the 
legacy  duty.  When  age  came  on,  he  gave  all  his  personal  estate  to 
his  eldest  son,  reserving  to  himself  a  life  interest  in  the  whole. 
The  son  became  a  lunatic,  and  died.  The  bereaved  lather  had  to 
pay  probate,  legacy,  and  intestate  duty  on  his  own  property,  and 
died  shortly  afterwards  of  the  double  grief.  Then  the  estate  paid 
legacy  duty  again. 

If  Pitt's  finance  was  bad,  that  of  his  successors  was  worse.  His 
efforts,  well  meant  I  do  not  doubt,  were  full  of  misery  for  the  poor. 
They  wore  him  out,  and  he  died  mox  daturus  progenievi  vitiosiorem. 
After  a  short  interval,  he  was  succeeded  by  Perceval,  Perceval  by 
Vansittart,  perhaps  with  the  exception  of  Dashwood,  sixty  years 
before,  the  most  incompetent  Chancellor  of  the  Exchequer  who 
ever  did  mischief.  Eobinson  and  Huskisson  were  incomparably 
superior  to  him,  and  gradually  sounder  principles  of  finance  at  last 
prevailed.  Parliamentary  reforms  came,  and  for  nine  years  the 
Whigs  were  in  office.  They  were  not  successful  in  finance.  Their 
fiscal  policy  led  to  their  downfall  in  1841,  and  a  new  departure 
began  with  Sir  Eobert  Peel. 

Now  in  1830,  Sir  Henry  Pamell,  afterwards  Lord  Congleton,  an 
Anglo-Irishman  of  distinguished  Parliamentary  descent,  for  he  was 
son  to  the  last  Speaker  of  the  Irish  House  of  Commons,  put  out  a 
very  significant  treatise  on  Financial  Keform,  this  treatise,  in  fact, 
being  a  series  of  experiences  which  he  had  arrived  at  as  Chairman 
of  the  Finance  Committee  of  the  House  of  Commons.  He  wished 
to  repeal  all  taxes  on  raw  materials,  taking  the  words  in  their 
popular  meaning,  all  taxes  in  which  excise  regulations  iaterfered 
with  the  course  of  manufacture,  and  to  reduce  the  taxation  of  spirits 
and  tobacco  so  as  to  obviate  smuggling.  In  order  to  fill  up  the 
deficit  created  by  these  necessary  reforms  in  the  fiscal  system  of  the 
country,  he  suggested  that  an  income  and  property  tax  should  be 
imposed. 

The  income  tax  was  imposed  by  Pitt  at  the  period  of  his  greatest 
trouble  in  1799,  at  10  per  cent.  This  full  rate  was  payable  only 
on  incomes  of  £200  and  upwards,  was  not  taken  at  all  from  those 


THE  INCOME  TAX  AND  ITS  HISTOBY.  475 

under  £60,  and  was  differential  between  £200  and  £60.  After  the 
peace  of  Amiens  it  was  repealed,  but  reimposed  when  war  broke 
out  again,  when  it  was  divided  into  five  schedules.  It  was  payable 
on  all  income  derived  from  property  in  Great  Britain,  whether  the 
owner  resided  in  the  kingdom  or  not,  and  on  all  property  yielding 
an  income  in  Great  Britain  or  elsewhere.  The  tax  yielded  about 
six  millions,  and  as  I  know  from  those  who  had  to  endure  it,  in 
addition  to  taxes  upon  every  necessary  or  convenience  of  life,  it 
was  a  very  severe  infliction.  After  1815,  the  country  insisted  on  its 
repeal,  though  Castlereagh  implored  Parliament  not  to  turn  its 
back  upon  itself,  a  gymnastic  feat  which  one  would  think  im- 
possible. 

When  Peel  came  into  office  in  September,  1841,  there  had  been  a 
succession  of  deficits.  But  there  were  about  1200  articles  in  the 
customs  tariff,  some  of  which  yielded  next  to  nothing,  so  thoroughly 
had  past  financiers  racked  the  earth  and  its  products  for  taxes.  Peel 
took  up  Parnell's  idea,  determined  on  reforming  the  tariff,  and 
claimed  as  compensation  for  loss  of  revenue  an  income  tax  on  the 
lines  of  the  old  tax  of  7d.  in  the  £  for  four  years.  He  made  some 
important  changes  in  the  assessment.  He  allowed  a  total  exemp- 
tion on  incomes  up  to  £150,  and  showed  considerable  favour  to 
farmers  in  England  and  Scotland,  reckoning  the  profits  of  the 
former  at  one  half,  of  the  latter  at  one  third  the  rent,  a  prodigious 
satire  on  the  rack-rents  of  the  time,  aided  as  they  were  by  the  Corn 
Laws.  It  is  not  easy  to  see  in  this  exemption  whether  Peel 
intended  to  gratify  his  followers,  to  prepare  the  way  for  a  repeal  of 
the  Com  Laws,  or  to  accentuate  the  severity  of  the  rents  then 
ordinarily  payable,  for  it  is  plain  that  a  rent  could  not  be  equitable 
whicii  in  England  was  worth  twice  the  maintenance  and  profits  of 
the  tenant,  and  in  Scotland  three  times. 

The  income  tax  of  1842,  which  has  continued  both  in  war  and 
peace,  long  after  the  wisdom  of  Peel's  financial  policy  has  been 
demonstrated,  was  imposed  in  order  to  cover  the  risks  of  a  financial 
experiment.  As  the  facts  turned  out,  there  was  no  reality  in 
the  risk.  Industry,  liberated  from  more  than  a  thousand  tram- 
mels, grew  rapidly  and  successfully  imder  the  new  system, 
large  masses  of  the  pubhc  debt  were  paid  off,  financial  operations 
for  the  Liquidation  of  the  residue  were  rendered  possible,  and  one 


476  THE  THEOBY  OF  MODEBN  TAXATION. 

must  acknowledge  also  that  expenditure  greatly  increased.  As  time 
went  on,  and  the  number  of  ar'i;les  visited  with  customs  and 
excise  were  reduced  to  not  moro  than  1  per  cent,  of  those  so 
attacked  when  Peel  first  took  the  tariff  in  hand,  the  plea,  of  very- 
doubtful  validity,  was  put  forward,  that  the  income  tax  was  the 
equivalent  for  a  much  larger  remission  of  taxation.  Of  course  the 
statement  is  absolutely  inaccurate,  for  the  remissions  in  question 
affected  all  incomes,  and  especially  those  which  were  earned  in  the 
form  of  weekly  wages ;  while  the  equivalent  in  the  income  tax  was 
paid  only  by  a  limited  class.  Nor  is  the  reasoning  more  valid, 
which  alleges  that  those  who  have  an  income  above  that  level  are 
better  able  to  afford  the  tax  than  those  who  are  below  it.  In  the 
first  place,  all  wage  incomes  paid  weekly  or  at  short  intervals, 
though  in  some  skilled  crafts  they  are  considerably  above  the  limit, 
are  practically  exempt,  if  not  legally  ;  and  in  the  next,  the  exigen- 
cies of  certain  callings  demand  outgoings  from  which  the  wage- 
earning  classes  are  exempt.  A  man  who  earns  his  living  by  reason 
of  his  clerkly  or  intellectual  or  professional  gifts  cannot  get  it  if  he 
is  clad  like  an  artisan,  or  is  housed  like  one,  though  he  may  be  seri- 
ously stinted  in  his  household.  The  necessary  outgoings  of  certain 
classes  are  a  very  considerable  first  charge  on  professional  or  quasi- 
professional  incomes,  and  no  imposer  of  taxes  ought  to  be  able  to 
force  such  people  to  the  manifestation  of  heroic  poverty. 

It  is  impossible  to  dispute  the  intrinsic  inequality  and  unfairness 
of  Peel's  income  tax.  It  taxes  precarious  incomes  at  equal  rates 
with  permanent  ones.  It  is  no  answer  to  say,  with  Mr.  Mill,  that 
the  precarious  income  pays  for  a  shorter  time  than  the  permanent 
one  does.  For,  first,  the  income  tax  always  professes  to  be  a 
terminable  expedient,  and,  I  presume,  the  pledges  of  Parliament 
ought  to  go  for  something  ;  and,  next,  the  veriest  tyro  in  analytical 
economics  can  see  that  in  a  precarious  income  capital  and  profits 
are  taxed,  in  a  permanent  one  profits  only.  Indeed,  so  serious  is  this 
consideration,  that  one  of  the  most  inconvenient  obstacles  to  the 
extinction  of  debt  through  terminable  annuities  by  those  who  could 
best  float  them,  as,  for  example,  life  insurance  offices  and  banks,  is 
the  ob^dous  actuarial  fact,  that  a  numerically  equal  tax  on  permanent 
and  terminable  incomes,  is  a  differential  tax  to  the  disadvantage  of 
the  latter.     Again,  it  taxes  unequal  outlay  at  equal  rates.      The 


AN  INCOME  TAX  INTRINSICALLY  UNFAIR.  477 

Winner  of  a  professional  income  in  a  town,  often  in  a  particularly 
expensive  district  of  a  town,  must  needs  make  a  greater  outlay  on 
an  obvious  necessary  of  life,  his  house-rent  and  its  incidents,  no  part 
of  which  he  is  permitted  to  deduct  from  his  earnings,  than  one 
who,  having  an  independent  income,  can  elect  his  own  place  of 
residence,  and  his  own  scale  of  expenditure.  Again,  though  this  is 
a  more  disputable  point,  the  family  charges  of  one  man  may  be 
greatly  in  excess  of  those  incurred  by  another.  There  are  to  be 
sure  economists  who  are  so  alarmed  at  the  Malthusian  theory,  that 
they  seem  to  hold  that  the  continuity  of  the  human  race  demands 
an  apology,  that  it  is  a  misfortune,  almost  a  crime.  But  taking 
the  facts  as  they  are,  it  cannot  be  doubted  that  a  person  who  has 
to  bear  these  charges  is,  from  the  taxpayer's  point  of  view,  worse 
off  than  the  man  who  is  free  from  them,  and  therefore  in  an  equal 
charge  suffers  more  severely  than  his  less  burdened  neighbour.  Now 
it  is  no  answer  to  say  that  taxation  is  inevitably  unequal.  This 
may  be  admitted,  without  one's  conceding  that  a  financier  should 
select  a  tax  which  is  sure  to  be  more  unequal  than  any  other,  and  to 
be  at  no  pains  whatever  to  deal  with  its  schedules.  Least  of  all  is 
it  an  answer  to  say,  that  the  persons  to  whom  I  refer,  being  per- 
mitted to  make  their  own  return,  are  enabled  to  rectify  the  inequali- 
ties of  their  lot.  In  the  first  place,  they  do  not  always  do  so;  in  the 
next  place,  that  law  is  to  be  condemned  which  cannot  be  just,  unless 
the  object  of  it  is,  put  in  plain  English,  to  commit  a  fraud  in  order 
to  escape  an  injustice. 

Besides,  it  is  possible  to  transfer  an  income  tax.  A  trader  is 
pretty  certain,  in  dealing  with  his  customers,  to  treat  all  his  out- 
goings, house-rent,  local  taxation,  his  own  necessary  maintenance, 
the  inevitable  charges  of  his  calling,  as  part  of  the  cost  of  distributing 
the  goods  in  which  he  deals.  He  has  every  motive  and  every  power, 
all  traders  equally  contributing  the  tax,  to  include  income  tax,  and 
even  the  highest  contingency  of  it,  in  the  initial  cost  of  his  goods. 
He  is  practically  paying  a  licensing  duty,  and  he  is  impelled  to 
exact  that  from  his  customers.  This  result,  which  is  obvious  to 
the  analyst  of  trade  profits,  was  curiously  illustrated  by  the  argu- 
ments employed  by  a  deputation  of  London  traders,  who  some 
fifteen  years  ago  waited  on  Mr.  Lowe,  then  Chancellor  of  the 
Exchequer,  to  complain  of  the  Co-operative  Stores.     They  alleged 


478  TEE  THEOBY  OF  MODEBN  TAXATION. 

that  tliey  could  not  compete  in  cheapness  against  these  stores, 
because  the  latter  paid  no  income  tax.  This  reasoning  had  no 
meaning  if  it  had  not  been  their  practice  to  make  their  customers 
pay  the  income  tax  which  was  imposed  on  them  as  traders,  and  Mr. 
Lowe  admitted  to  me  that  it  had  no  other. 

The  latest  finance,  then,  of  the  British  Parliament  has  reduced 
taxable  objects  to  a  very  few  articles.  It  intends  as  far  as 
possible  and  with  considerable  numerical  success  to  distribute 
taxation  in  tolerably  equal  moieties  between  those  who  earn  less  than 
£100  a  year,  and  those  who  earn  more  than  £100,  and  very  in- 
genious and  perfectly  fair-minded  analysts  of  taxation  inform  us 
that  this  result  is  obtained.  The  former  are  visited  with  the  greater 
part  of  the  indirect  taxation,  with  by  far  the  most  of  the  excises 
and  customs  still  levied,  and  with  a  small  amount  of  the  stamp  and 
succession  duties.  The  latter  pay  the  income  tax,  the  greater  part 
of  the  succession  and  stamp  duties,  the  assessed  taxes,  and  much  of 
such  customs  as  are  paid  for  those  luxuries  of  foreign  origin  which 
can  be  purchased  only  by  fairly  well  to  do  persons.  Of  course, 
even  under  these  circumstances,  the  contribution  of  the  poorer 
classes  will  and  must  represent  a  greater  sacrifice  on  their  part.  I 
cannot  see  how  this  can  be  avoided,  unless  indirect  taxation  is 
wholly  remitted,  and  direct  taxation  substituted  for  it.  But  such 
a  new  arrangement  would  be  wholly  impossible  and  intolerable, 
unless  a  property  tax  were  adopted  in  the  place  of  an  income  tax, 
and  the  liability  to  this  tax  be  put  on  all  property  alike. 

It  is  not  easy  to  impose  a  new  tax,  and  in  the  present  condition 
of  public  expenditure,  it  is  not  easy  to  remit  one.  I  do  not  discuss 
whether  the  rejection  of  Mr.  Childers'  budget  in  1885  was  due  to 
financial  dislike  merely.  But  it  was  a  strong  deterrent,  and  will 
probably  remain  a  strong  one  for  some  time,  for  the  rejection  of  a 
budget  is  a  disagreeable  surprise  to  any  financier.  Nor  can  it  be 
doubted  that  the  financial  income  of  the  United  Kingdom  has  shown 
signs  of  inelasticity  in  some  of  its  most  important  particulars.  But 
the  general  wisdom  of  our  financial  system  is  admitted  by  all  whose 
opinion  is  worth  anything,  and  any  serious  attempt  to  alter  it  would 
be  met  with  opposition  from  many  quarters  where  opposition  might 
be  unexpected,  but  would  be  very  decided. 


xxn. 


THE   OBJECT   AND   CHAEACTER  OP  LOCAL  TAXATION  IN 

ENGLAND. 

Central  and  local  government — Cattsea  which  lead  to  federal  systems 
or  discourage  them — America,  France,  England-— Ancient  local 
liabilities  illustrated  by  the  Tandridge  rate — The  growth  of  local 
taxation  modern — The  poor  rate — The  relief  of  destitution  justi- 
fied— The  maintenance  of  roads — Mr.  Goschen's  Committee — The 
cost  of  police,  of  prisons,  hospitals — The  charge  of  national 
education,  of  sanitary  improvements — Local  debts — Modern  ex- 
pedients — Local  taxation  subsidised — The  motion  of  March  23, 
1886. 

All  communities  which  have  arrived  at  anything  like  political  and 
social  organization  have  experience  of  two  forces,  one  of  which 
draws  them  towards  the  central  government,  the  other  inclines 
them  towards  local  administration.  Constitutional  antiquaries,  who 
have  searched  into  such  evidence  of  the  conduct  of  early  societies 
as  have  survived,  assure  us  that  the  latter  preceded  the  former 
system,  and  we  know  that  there  has  been  an  historical  struggle  on 
the  part  of  the  former  to  supersede  or  to  control  the  latter.  The 
motive  of  the  former  has  been  the  reality  or  the  pretence  of  the  public 
safety,  which  could  not,  it  was  alleged,  be  secured,  unless  the 
authority  and  completeness  of  local  administration  were  circum- 
scribed. But  the  local  administration,  having  ail  the  forces  of 
tradition,  and  not  a  few  of  the  conveniences  of  experience  on  its 
side,  while  admitting  that  the  central  government  must  be  recog- 
nized and  supported,  insists  that  local  autonomy  provides  a 
machinery  of  self-government  which  is  certain  to  be  respected, 


480    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

which  is  more  intelligent  and  acute  than  departmental  administra- 
tion could  be,  and  can  be  worked  with  greater  efficiency  and 
economy.  There  are  reasons  in  favour  of  centralization,  there  are 
reasons  for  decentralization,  and  there  is  a  sphere  for  the  action  of 
both.  The  question  as  to  which  kind  of  common  action  shall  be 
referred  to  either  function  has  been,  and  will  remain,  matter  of 
debate.  But  in  a  decision  on  the  question  is  involved  the  settle- 
ment of  the  most  effective  and  least  harassing  form  of  social 
government.  I  shall  not  be  touching  on  political  controversy 
when  I  state,  as  most  of  you  are  well  aware,  that  the  subject 
is  occupying  the  serious  attention  of  most  English  statesmen 
now,  and  that  the  controversies  which  have  been  made  promi- 
nent in  recent  times,  are  likely,  as  time  passes  on,  and  experience 
becomes  more  and  more  a  guide  to  action,  to  become  less  personal 
and  less  bitter. 

Events,  which  in  the  history  of  nations  are  so  remote  that  they 
seem  to  be  merely  antiquarian,  have  had  a  great  influence  in 
inclining  communities  towards  centraHzation,  or  towards  federalism 
under  a  central  authority  or  parliament.  Thus  in  France,  the 
initiative,  even  in  matters  of  purely  local  business,  has  been  taken 
away  from  the  local  authority,  and  has  been  referred  to  the  central 
government.  In  the  United  States,  the  doctrine  that  the  state  is 
still  sovereign,  and  that  the  powers  of  the  President,  his  Cabinet, 
the  Senate,  and  the  House  of  Eepresentatives  of  Washington, 
though  inalienable,  are  circumscribed,  is  constitutional,  and  has 
been  recently  re-affirmed.  The  doctrine,  it  is  true,  suffered  some 
severe  shocks  shortly  after  American  independence  was  secured,  and 
/l^  when  the  great  Civil  War  ^aged  a  quarter  of  a  century  ago.  On  the 
other  hand,  though  there  was  evidently  a  design  on  the  part  of 
those  public  men  who  guided  the  action  of  France  in  and  after 
1789,  to  found  a  republic  on  the  model  of  the  American  Union, 
these  persons  repudiated  the  most  characteristic  part  of  the 
American  system,  the  free  but  permanent  union  of  a  number  of 
independent  states.  Soon  afterwards,  federalism  was  denounced  as 
treason,  and  the  suspicion  of  any  sympathy  with  such  a  social 
theory  was  in  the  highest  degree  dangerous.  Now  these  differences 
in  the  constitution  of  two  communities  were  due  to  historical 
causes. 


FEDERAL  AND  CENTBAL  GOVERNMENT.  481 

The  American  plantations  were  voluntary  settlements,  in  the 
administration  of  which  the  English  crown  readily  accorded  a  con- 
siderable amount  of  independence.  Sometimes,  as  in  the  New 
England  colonies,  the  adventurers  consisted  of  a  body  of  men 
flying  from  a  distasteful  religious  organization,  not  to  proclaim 
toleration,  but  to  construct  as  rigid  and  despotic  a  government  as 
that  which  they  sought  to  avoid.  Some  were  conquests,  as  New 
York  and  New  Jersey^  easily  acquired  from  the  original  bettlers, 
and  easily  rehnquished  by  the  countries  which  founded  them. 
Most  of  them,  however,  were  proprietary  colonies,  as  Maryland, 
Pennsylvania,  Virginia,  and  the  Carolinas,  in  which  the  representa- 
tives of  the  founders  were  the  hereditary  administrators  of  the 
plantation.  In  course  of  time,  and  after  at  least  two  abortive 
efforts,  the  proprietary  rights  were  extinguished,  generally  by 
purchase,  as  the  plantations  came  more  and  more  under  tho 
mercantile  regulations  of  Parliament,  and,  within  certain  limits,  all 
became  autonomous.  These  settlements,  then,  had  no  other 
experience  than  that  of  advantage  in  the  development  of  their 
automony,  and  when  they  combined  together  for  a  common 
purpose  would  naturally  relinquish  as  little  as  possible  of  that 
independence,  which  to  the  popular  mind  marked  the  growth  of 
their  local  Hberties.  It  became  necessary  in  the  early  history  of 
the  American  Union  to  control  these  State  Rights,  in  order  to 
strengthen  the  Washington  government,  but  the  doctrine  that  the 
association  was  voluntary  remained,  and  formed  the  principal 
justification  of  the  Southern  secession.  At  the  present  time, 
under  well-defined  and  intelligible  limits,  the  American  State 
administers  its  own  affairs,  has  its  own  Governor,  Senate,  House 
of  Eepresentatives,  imposes  and  collects  taxes  by  its  own  authority, 
and  possesses  large  powers  of  administration  within  its  own  area. 
In  some  particulars  and  these  of  awkward  significance,  the  Supreme 
Court  of  the  United  States  has  declared  that  no  central  authority 
can  control  a  state,  particularly  in  incurring  state  debts  and 
repudiating  or  forcibly  converting  them. 

France,  however,  was  slowly  built  up,  partly  by  conquest,  partly 
by  the  persistent  assertion  that  the  king  was  paramount  over  the 
numerous  princes  among  whom  France  was  partitioned.  In  the 
middle  of   the  twelfth  century,  the  authority  of  the  French  king 

32 


482    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

over  the  great  fiefs  of  Normandy,  Guienne,  and  Toulouse  "was  in  the 
last  degree  shadowy.  Our  own  Henry  II.  was  the  real  ruler  over 
the  sea-board  of  France,  from  the  mouth  of  the  Seine  to  the 
Pyrenees,  and  the  customs  of  this  feudal  kingdom  recognized  the 
right  of  the  vassal  to  make  war  on  his  lord  paramount,  at  least  till 
as  late  as  the  reign  of  Saint  Louis.  The  grandfather  of  this  king 
challenged,  with  much  astuteness,  and  on  every  opportimity,  the 
exercise  of  this  right.  He  stripped  John  of  Normandy  and 
Brittany,  and  probably  if  John's  mother  had  not  been  ahve,  when 
his  reputed  offence  had  been  committed,  he  would  have  appropriated 
Guienne.  At  the  end  of  the  century  Le  made  use  of  the  real  or 
imputed  heresies  of  Provence  to  establish  his  authority  firmly 
in  the  south.  But  it  must  not  be  supposed  that  this  policy  was 
alwajs  readily  submitted  to.  The  only  enemy  which  the  French 
king  seriously  feared  was  the  party  of  the  great  nobles,  and  those 
people  were  quite  alive  to  the  fact  that  they  were  being  subdued  in 
detail.  Twice,  by  their  open  assistance,  the  English  overran  and 
nearly  partitioned  France.  The  struggles  of  the  sixteenth  century, 
between  the  French  king,  the  Leaguers,  and  the  Huguenots,  were 
aristocratic  revolts,  following  on  the  last  attempt,  by  Charles  the 
Bold,  to  dismember  Eastern  France.  The  effort  after  independence 
on  the  part  of  the  nobles  was  continued  till  the  war  of  the  Fronde. 
Anything  else,  then,  except  deference  and  submission  to  the  central 
authority,  seemed  by  the  experience  of  ages  to  be  an  attempt  to 
lessen  the  dignity,  and  to  break  up  the  unity  of  the  nation.  It  is 
not  wonderful,  then,  that  the  very  shadow  of  local  independence  was 
looked  on  with  dismay  and  anger  in  France,  and  that  even  the 
republicans  of  1789,  with  the  cry  of  liberty,  fraternity,  and 
equality,  gave  an  exceedingly  qualified  meaning  to  this  historical 
phrase. 

The  social  history  of  England  has  proceeded  on  lines  midway  to 
the  state  rights  of  the  American  repubhc,  and  the  excessive 
centralization  of  the  French  monarchy.  In  early  times  the  right  of 
self-government  appears  to  have  been  almost  complete  in  every 
village  and  town.  As  a  measure  of  police  and  public  safety,  the 
government  of  the  Conquest  undertook  an  investigation  into  cases 
of  homicide,  and  it  would  seem  in  this  manner  it  quenched  the 
embers  of  that  guerilla  warfare  which  plainly,  and  to  the  infinite 


FBANCE.    EISIGLAND.  483 

injury  of  the  country,  followed  on  the  first  victory  of  William  the 
Norman.  There  were  also  severe  forest  lav/s,  but  these  were,  I 
believe,  exceptionally  directed  against  brigandage,  though  capable 
of  being  made  exceedingly  oppressive.  Otherwise,  however,  justice 
appears  to  have  been  administered  by  the  self-appointed  or  spon- 
taneous poHce  of  the  Lord's  Court,  and  was,  as  I  conclude,  from  read- 
ing many  hundreds  of  early  manor  records,  respected  and  effective. 
Similar  justice  appears  to  have  been  administered  in  the  towns, 
when  they  were  not  chartered,  the  principal  object  of  the  charter 
being  to  bring  about  that  the  administration  of  the  affairs  of  the 
corporation  should  be  conducted  by  elected  magistrates.  When  the 
troubles  with  labour  began  after  the  Great  Plague,  the  first  remedy 
applied  was  the  Lord's  Court.  But  in  this  the  presentment  was  by 
a  jury  of  the  inhabitants,  and  it  is  not  surprising  that  this  should 
have  not  been  found  effective,  considering  that  the  jury  was  from 
the  class  whom  the  law  was  trying  to  coerce.  The  labour  statutes 
were  thenceforward  administered  by  the  justices  of  the  peace,  whose 
object  it  was  to  coerce  the  peasants.  But  I  have  pointed  these 
facts  out  before.  I  refer  to  them  now,  only  to  show  how  universal 
was  the  ancient  English  system  of  local  self-government. 

Now  we  are  told  that  from  the  earliest  date  the  resident  English- 
man was  liable  to  three  local  obligations — the  defence  of  the  realm 
in  case  of  invasion  (a  liability  well  illustrated  by  the  Assize  of  Arms), 
the  repair  of  bridges,  and  the  maintenance  of  roads.  But  it  is 
singular  that  neither  in  the  accounts  which  I  have  examined,  and 
they  are  many  thousands  in  number,  nor  in  the  record  of  the 
manor  business,  have  I  found  any  notice  of  a  charge  imposed  for 
these  purposes.  Roads  there  were  in  plenty.  Bridges  certainly 
existed.  Now  it  is  quite  clear  that  the  roads  were  good,  for  many 
years  ago,  when  I  collected  evidence  as  to  the  cost  of  carriage  over 
known  distances — and  I  may  add,  over  roads  now  existing  as  well  as 
then— I  was  extremely  surprised  at  the  rapidity  and  cheapness  with 
which  goods  were  conveyed,  all  things  considered.  That  the 
villagers  repaired  their  own  roads  is,  I  think,  obvious ;  it  was 
unquestionably  their  interest  to  do  so.  That  the  owners  of 
scattered  properties  did  so  was  equally  in  their  interest.  It  is 
wonderful  to  see  how  property  even  in  the  same  parish  or  manor 
was  scattered.      It  is  equally  wonderful  to  see  how    monastic 


484    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND, 

property  was  scattered,  and  how  rare  it  was  that  an  estate  was  not 
loaded  with  some  burden,  which  the  piety  or  policy  of  the  earlier 
owner  had  imposed  on  his  heir,  or  his  heir's  alienee.  Now  every- 
thing which  diffuses  property  laden  with  these  obligations  suggests 
the  wisdom  of  keeping  communications  open.  I  am  quite  sure  that 
roads  in  England  were  in  far  better  repair  in  the  time  of  Edward 
the  Third  than  they  were  in  the  time  of  George  III.  I  do  not  say 
that  the  ancient  roads  were  level,  macadamized,  and  well  metalled ; 
but  they  are  infinitely  better  than  the  turnpike  roads  of  which 
Matt.  Bramble,  in  Smollett's  novel  of  "  Humphrey  Clinker,"  com- 
plains so  bitterly.  My  evidence,  then,  as  to  local  taxation  for  roads 
up  to  the  sixteenth  century  is  entirely  negative. 

The  first  local  charge  which  I  am  able  to  trace  is  that  levied  and 
distributed  for  the  relief  of  the  poor  and  other  pubHc  purposes. 
Now  in  the  years  1541-1601  inclusive,  twelve  Acts  of  Parliament 
were  passed  for  the  relief  of  the  poor,  the  last  being  the  famous 
statute  43  Eliz.  cap.  2,  the  basis  of  our  poor  law  system  for 
more  than  two  and  a  quarter  centuries.  We  can  read  about  these 
Acts  in  any  of  the  two  Collections  of  Statutes  at  large,  though  as 
regards  one  of  these  Collections,  beginning  with  those  printed  by 
order  of  Henry  VHI.,  it  may  be  doubted  whether  there  are  more 
than  two  perfect  copies  in  existence,  perhaps  not  even  two.  Of 
their  administration  there  is  even  less  trace.  But  I  have  been 
fortunate  enough  to  find  an  original  illustration  of  an  assessment 
for  the  relief  of  the  poor  in  a  Surrey  parish,  in  1600,  i.e.,  under  the 
Act  39  Eliz.  cap.  8.  The  document  is  the  original  manuscript  of 
the  committee  of  parishioners,  to  use  a  modern  phrase,  who  in  this 
year  were  called  upon  to  survey  the  parish,  and  to  fix  the  contribu- 
tions of  the  occupiers  to  several  objects — the  relief  of  maimed 
soldiers,  the  hospital  and  prisons  of  Surrey,  the  carriage  of  the 
Queen's  household,  especially  of  coals,  for  the  composition  for  pro- 
vision, for  oats,  &c.,  for  the  Queen's  stable,  for  setting  the  poor  to 
work,  and  for  the  relief  of  the  poor. 

Tandridge  is  a  Surrey  village  on  the  Kentish  border.  The  parish 
lies  rather  high,  and  is  of  only  average  fertility.  Before  the 
Eeformation  it  possessed  a  hospital,  to  which  charity  a  good  deal  of 
the  parish  was  annexed.  This  foundation  feU  at  the  Dissolution 
into  the  hands  of  Mr.  Froude's  patriot  kuig,  as  indeed  nearly  every- 


ANCIENT  LOCAL  LIABILITIES,  485 

tiling  else  fell,  and  was,  it  seems,  parcelled  out  among  nnmerons 
proprietors,  probably  to  a  great  extent  purchasers  of  the  hospital 
lands,  and,  two  generations  before,  its  tenants  on  beneficial  leases.  I 
may  mention  that  in  the  spring  of  1600  wheat  was  25s.  4d.  a  quarter, 
and  malt  13s.  4d.,  and  beef  2d.  a  pound.  The  maimed  soldiers  were 
allowed  2d.  a  week,  and  the  charge  on  this  account  to  the  parish  is 
to  be  8s.  8d.  yearly,  so  that  the  parish  was  expected  to  find  this 
pension  for  fifty-two  weeks  in  the  year.  Of  course  this  was  not 
the  whole  of  the  soldier's  pension.  Double  the  sum  is  paid  for  the 
prisons  and  hospital  The  residue  of  the  rate  is  devoted  to  the  other 
objects,  and  you  will  notice  how  numerous  and  how  varied  were  the 
regular  charges  imposed  on  land  in  the  last  year  of  the  sixteenth 
century,  under  the  form  of  what  we  should  call  in  modem  phrase 
local  taxation.  You  will  also  notice  that  the  account  gives  no 
item  for  mending  roads,  but  as  the  parish  was  charged  with  a  pay- 
ment in  lieu  of  purveyance,  and  for  carriages  to  the  royal  house- 
hold, no  doubt  in  this  case  Greenwich  or  Eltham,  as  the  case  may 
be,  the  wisdom  of  keeping  their  roads  in  repair,  as  far  as  the  custom 
of  the  time  demanded,  must  have  been  very  apparent  to  the  occu- 
piers of  Tandridge.  It  appears  from  the  account  that  it  cost  7s.  6d. 
to  convey  a  load  of  coals  to  the  Court.  The  duty  of  the  parish 
was  probably  completed  by  the  carriage  of  a  single  load.  The  fixed 
annual  charges  of  the  parish  were  therefore  88s.  6d.,  and  the  rate 
at  a  penny  an  acre,  amounted  to  £9  12s.  7d.  The  people  of  Tand- 
ridge therefore  reckoned  on  having  to  spend  at  least  £7  19s.  Id.  on 
the  relief  of  the  poor,  and  the  overseer  is  instructed  to  collect  a 
second,  or  more  rates  as  soon  as  he  had  only  20s.  in  hand.  At  a 
shilling  a  week  for  each  destitute  person,  then,  they  reckoned  that 
they  had  permanently  three  persons  on  their  hands.  Taking  the 
land  at  Tandridge  in  1600  as  worth  a  shilling  an  acre  rent,  and  this 
is  a  full  rent,  the  local  rates  in  this  Surrey  parish  at  the  end  of  the 
sixteenth  century  were  at  least  Is.  8d.  in  the  pound. 

By  22  Henry  VIII.  cap,  5,  the  justices  in  Quarter  Sessions  were 
made  responsible  for  the  repair  of  county  bridges.  Now  the 
Parliament  of  1529  sat  for  six  years.  It  began  by  attacking 
Wolsey,  by  taking  cognizance  of  the  abuses  in  the  Church,  and  of 
Henry's  divorce.  It  passed  a  vast  amount  of  legislation,  established 
the  succession,  curbed  the  clergy,  and  suppressed  the  smaller  monas- 


486    CBABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND, 

fceries.  At  this  time  it  became,  it  seems,  necessary  to  find  some 
new  machinery  for  keeping  bridges  in  repair,  a  duty  which  I  have 
no  doubt  had  hitherto  been  practically  fulfilled  by  the  monastic 
bodies  until  the  dissolution  was  in  the  air.  Under  this  Act  the 
magistrates  in  Quarter  Sessions  were  empowered  to  levy  a  tax  on  all 
the  inhabitants,  landowners  or  not,  towards  the  repairs  of  public 
bridges.  In  course  of  time  the  precept  of  the  justices  was  made  a 
valid  order  on  the  overseers  or  receivers  of  poor  rates.  It  appears 
that  this  Act  of  Henry  VIII.  still  constitutes  the  law  on  county 
bridges. 

In  course  of  time,  two  of  the  local  liabilities,  the  composition  for 
purveyance  and  the  obligation  to  carry  the  fuel  necessary  for  the 
royal  residence  became  obsolete,  as  did  also  the  provision  for  the 
pensions  of  soldiers,  while  the  liability  to  maintain  the  poor,  to 
repair  the  roads,  and  to  pay  a  contribution  to  prisons  and  hospitals, 
remained  obhgations.  During  the  seventeenth  century  the  cost  of 
maintaining  the  poor  became  a  growing  charge,  the  amount  of 
which  was  very  great  in  proportion  to  other  liabilities,  and  far 
heavier  in  relation  to  the  ordinary  revenue  of  the  Crown  than  it  was 
in  the  worst  and  latest  ages  of  the  old  Poor  Law.  In  the  latter  part 
of  Charles  II.'s  reign  it  was  returned  at  £665,362,  according  to 
Davenant,  or  more  than  a  third  of  the  whole  revenue  in  the  time  of 
peace.  It  would  seem,  as  this  author  mentions  no  deductions  from 
the  poor  rate  for  other  local  purposes,  that  the  whole  of  this 
amount  was  expended  for  the  relief  of  the  poor  only,  and  for 
such  other  ancient  incidents  as  were  imposed  on  the  occupancy  of 
land. 

The  development  of  local  taxation  is  very  modern.  It  is  partly 
the  outcome  of  larger  powers  given  to  local  authorities,  partly  to 
the  spread  of  knowledge  as  to  the  laws  of  health,  partly  to  the 
convenience  which  there  is  in  finding  an  area  for  taxation,  the 
habit  of  being  taxed  with  patience  being  formed,  partly  to  the  oppor- 
tunity which  the  existing  system  gives  of  imposing  a  charge  on  one 
person  the  effects  of  which  shall  be  found  beneficial  by  another 
person.  It  is  also  a  remarkable  feature  in  modern  local  taxation 
that  the  person  who  pays  nothing,  but  makes  other  people  pay  for 
him,  constantly  becomes  the  mouthpiece  of  those  who  do  pay,  and 
by  raising  the  cry  of  peculiar  burdens  on  land,  when  these  burdens 


THE  POOB  BATE,  487 

are  imposed  on  the  occupier,  is  enabled  to  appear  as  the  enlightened 
and  patriotic  advocate  of  fiscal  reform,  when  he  knows  that  he  is  in 
reality  engaged  in  an  attempt  to  further  burden  those  whose  claims 
he  so  generously  advocates. 

Whatever  may  be  said  of  imperial  taxation,  that  which  is  levied 
for  local  purposes  is  either  the  satisfaction  of  a  duty  or  a  beneficial 
outlay.  The  invariable  defence  of  the  old  Poor  Law  was  that  it  was 
a  compensation  for  rights  in  the  soil,  commonable  and  other,  of 
which  the  peasantry  were  deprived  under  the  numerous  enclosure 
Acts  of  the  eighteenth  and  early  part  of  the  nineteenth  centuries. 
"  We  admit,"  such  people  alleged,  **  that  the  poor  have  from  time 
immemorial  had  common  of  pasture  in  the  open  fields,  and  the 
nnenclosed  pasture.  We  allow  that  when  the  enclosure  Acts  were 
passed,  such  rights  were  confiscated  without  compensation,  for  they 
alone  shared  in  the  enclosed  districts  who  had  estates  of  inheritance 
within  the  boundaries  of  the  parish.  But  an  adequate  equivalent 
has  been  given.  The  maintenance  of  those  who  have  been  dispos- 
sessed is  a  first  charge  on  our  estates,  the  new  and  the  old.  We 
must  lose  all  our  rents  before  the  poor  can  want."  And  to  do  them 
justice,  many  persons  reasoned  in  this  manner  when  the  new  Poor 
Law  was  ventilated,  and  finally  carried,  even  though  the  incidence 
of  the  old  law  was  fouud  intolerably  heavy,  and  in  one  or  two 
nnlucky  parishes,  of  which  much  was  made,  the  poor  rate  had 
actually  extinguished  the  rent. 

A  poor  rate  is  inevitably  a  rate  in  aid  of  wages.  Even  when  it  is 
refused  to  the  able-bodied,  who  could  have  made  provision  against 
the  ordinary  risks  of  destitution,  it  is  very  difficult  for  any  forethought 
within  a  working  man's  opportunities  to  make  provision  against 
prolonged  sickness,  or,  if  he  have  wife  and  child  dependent  on  him, 
against  the  risks  of  accidental  death.  Nor  does  it  seem  to  me  pos- 
sible for  an  ordinary  working  man,  subsisting  entirely  on  wages,  and 
having  no  income-yielding  pioperty  on  which  to  rely,  to  provide 
against  old  age.  Now,  unless  wages  can  cover,  in  addition  to  a 
decent  maintenance,  the  risks  of  sickness  and  the  certainty  of  in- 
capacity, they  must  be  supplemented  by  private  or  public  charity, 
ie.j  either  by  alms  or  rates.  Hence  it  seems  obvious  that  they  who 
employ  labour  with  a  view  to  profit,  and  under  my  hypothesis  get 
this  labour  at  less  than  the  natural  rate,  should  alone  supplement 


488    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

the  deficiency  of  what  they  pay.  In  a  rough  way  this  was  the  case 
when  EHzabeth's  statute  was  enacted.  Almost  all  persons  were  at 
once  occupiers  and  owners,  even  in  the  towns.  The  parson,  besides 
being  an  owner  of  tithes  in  kind,  the  collection  and  preparation  o! 
which  for  market  required  labour,  was  also,  nine  cases  out  of  ten, 
the  cultivator  of  his  own  glebe,  nay,  in  not  a  few  benefices,  had 
the  whole  of  his  endowment  in  land.  Undoubtedly  owing  to  an 
ancient  belief  that  the  tithe  was  originally  charged  with  the  main- 
tenance of  the  poor,  the  parson  was  made  liable  to  more  than  his 
proper  share  of  the  charge.  With  better,  though  not  with  sufiScient, 
reason,  it  was  alleged  that  the  source  of  his  tithe  was  the  pro- 
duct of  human  labour,  and  should  be  charged  with  the  sustenance 
of  those  whose  toil  had  produced  it.  This  argument  became  more 
substantial  when  the  tithe  became  more  and  more  a  toll  on  the 
husbandman's  skill,  even  to  a  greater  extent  than  the  landowner's 
rent,  for  the  rent  was  exigible  only  when  the  skill  was  diffused, 
the  tithe  while  the  skill  remained  the  peculiar  property  of  the 
cultivator. 

But  the  levy  of  the  poor  rate  on  those  who  do  not  employ 
labour  with  a  view  to  profit,  as  agriculturists  and  manufacturers  do, 
or  derive  no  advantage  from  the  density  of  population,  in  con- 
sequence of  the  competition  for  building  sites,  as  landowners 
do  in  towns,  is  in  no  case  defensible,  except  on  the  plea  of 
usage.  It  is  true  that  most  persons  who  pay  notable  sums  for 
poor  rates  are  the  employers  of  domestic  servants,  taken  almost 
entirely  from  the  class  which  is  likely  to  require  parochial  relief. 
But  the  wages  of  such  persons  are  constantly  equal  in  private 
families,  their  board  included,  to  the  whole  earnings  of  the  agricul- 
tural labourer  for  himself  and  family,  and,  I  believe,  form  indirectly 
not  a  little  of  the  means  by  which  such  families  are  maintained;  for 
domestic  servants,  especially  women,  are  peculiarly  open  to  the 
claims  of  their  near  relations.  Treated  then  on  economical  grounds, 
there  is  no  justification  for  the  present  distribution  of  the  poor  rate. 
They  who  are  not,  on  these  grounds,  naturally  bound  to  pay,  in 
consequence  of  having  entered  into  definite  profit  and  loss  arrange- 
ment with  those  who  labour,  and  are  thereupon  economically  liable 
for  all  the  charges  which  are  essential  to  their  due  and  continuous 
labour,  do  pay,   while  those  who  enter   into  such  relations,  and 


THE  BELIEF  OF  DESTITUTION.  489 

from  my  analysis  should  pay,  are  pro  tanto  relieved  of  their 
habilities. 

I  have  taken  the  most  disputable  case  first,  for  I  am  far  from 
admitting  that  the  relief  of  the  poor  from  destitution  is  a  liability 
which  is  merely  to  be  measured  by  economical  considerations  and  by 
economical  duties.  They  ought  to  be  stated.  But  I  am  prepared 
to  admit  that  there  are  duties  which  are  higher  and  more  stringent 
than  those  which  an  economist  allows.  I  may  allege  that  no  man 
has  a  right  to  have  his  want  supplemented  out  of  my  abundance ; 
but  I  may  also,  with  perfect  consistency,  allege  that  it  is  my  duty 
to  supplement  it.  For  our  duties  are  not  to  be  measured  by  other 
people 's.ng]^ts.  They  are  much  wider  and  much  more  personal,  as 
the  better  instincts  of  every  man  teach  him.  It  is,  I  think,  unfor- 
tunate that  Mr.  Mill  has  based  the  obligation  of  maintaining  desti- 
tution on  the  ground  that  the  unfortunate  object  of  public  charity 
is  not  responsible  for  his  own  existence.  The  person  who  is 
constrained  by  law  to  support  him  may  retort  with  perfect  justice 
and  absolute  cogency,  that  he  is  not  responsible  either.  It  is,  in 
my  opinion,  infinitely  better  and  more  logical  to  base  the  obligation 
on  the  general  claims  of  humanity,  on  the  mischievous  effect  induced 
on  the  individual  man  when  he  sees  unrelieved  destitution,  and  on 
the  sentiment,  if  you  will,  which  urges  people  to  believe  that 
necessary  as  legal  relief  may  be,  it  is  better  if  possible,  except  to 
the  utterly  undeserving,  that  private  benevolence,  or  if  the  cause  be 
preventible,  legal  action,  should  obviate  as  far  as  possible  the 
necessity  of  applying  for  that  legal  relief.  For  destitution  may  be 
caused  by  law,  and  therefore  may  be,  I  will  not  say  remedied  by 
law,  for  effects  in  the  social  system  endure  after  causes  have  ceased, 
but  repressed  or  obviated  at  its  future  origin.  But  I  fear  that  I  am 
quitting  the  range  of  economical  reasoning,  and  intruding  into  the 
wider  and  more  suggestive  field  of  morals.  My  excuse  must  be 
twofold — first,  that  one  may  occasionally  soften  the  stem  inferences 
of  the  economist ;  next,  that  I  may  point  out  to  you  that  not  every 
social  fact  is  capable  of  a  complete  exposition  on  economical 
principles. 

The  poor  rate  used  to  bear  the  expense  of  roads  and  prisons,  and, 
in  so  far  as  the  duty  was  not  satisfied  by  compulsory  service,  of 
pohce.     The  roads,  to  be   sure,  since  1773,  were  on  the  whole 


490    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

maintained  by  tolls  levied  on  passing  veliicles,  considerable  excep- 
tions being  made  in  the  case  of  agricultural  carriages.  It  must  be 
allowed  that  some  thirty  years  before  new  methods  of  locoiuotion 
were  invented  or  applied,  the  trustees  of  these  roads,  animated  no 
doubt  by  motives  of  enlightened  sell-interest,  mended  them  decently. 
For  some  time,  however,  after  the  Act  of  1773  (you  may  find  it  in 
the  literature  of  the  time)  the  permission  to  levy  tolls  was  not 
made  the  ground  for  repairing  the  roads,  but  for  saving  the  rate. 
The  stage  coach  of  the  eighteenth  century  paid  heavy  tolls,  of 
course  taken  out  of  the  passengers'  fares,  and  was  not  infrequently 
stranded  in  a  slough.  There  is  a  story,  perhaps  a  legend,  that  at 
the  end  of  the  last  century  the  Oxford  coach  going  to  London, 
and  not  over -laden  with  University  professors,  was  absorbed  in  some 
Serbonian  bog  on  the  old  eastward  road  over  Shotover.  You  have 
heard  of  the  scholar  of  Queen's,  who  choked  the  Shotover  boar  that 
charged  him  with  his  Aristotle,  and  brought  his  head,  no  doubt,  to 
the  Christmas  festivities  of  that  college  of  the  plural  Queens.  Non 
dcfensoribus  istis,  non  tali  auxilio  must  have  been,  if  the  story  is  true, 
the  despairing  cry  of  those  engulfed  passengers.  The  story  may 
not  have  been  true,  but  it  must  have  been  possible. 

Now,  it  seems  to  me  inevitable  that  a  landowner  should  pay  for 
the  creation  and  maintenance  of  roads  to  his  estate.  I  dare  say 
they  are  ancient.  I  witnessed  what  I  have  no  doubt  is  the  history 
of  many  an  English  road  in  my  experiences  in  the  Rocky 
Mountains,  experiences  which  I  do  not  doubt  were  recognized  nine- 
teen or  twenty  centuries  ago  in  our  own  country.  The  first  track 
is  that  of  wild  animals  migrating  for  early  pastures,  and  I  may  say 
that  I  know  no  country  in  the  world  in  which  a  few  miles  of  north 
and  south  latitude  make  so  remarkable  a  difference  of  late  and 
early  growth  as  is  seen  in  the  British  Islands.  The  second  track  is 
that  of  the  savage,  who  utilizes  the  instinct,  if  we  can  use  this  word 
in  these  Darwinian  days,  or  limited  logical  faculties  of  the  brute. 
The  third  is  the  more  or  less  civilized  man,  who,  in  the  United 
States,  adopts  the  track  of  the  bison,  and  the  trail  of  the  Eed  Indian 
for  high-road  or  railway.  We  may  be  pretty  sure  that  most  of  the 
English  roads  have  as  ignoble  an  origin  as  that  of  the  American, — 
that  the  bos  pi'imigenius  taught  the  ancient  Briton,  that  the  ancient 
Briton  could  not  conceal  his  secret  from  the  Roman,  and  that  Saxon, 


THE  MAINTENANCE  OF  BOADS,  491 

Dane,  and  Norman  were  the  inheritors  of  this  traditional  knowledge. 
Depend  upon  it,  the  new  roads,  other  than  those  of  towns  made 
from  place  to  place  in  England,  during  the  last  two  centuries,  are 
not  more  than  1  per  cent,  of  the  existing  roads,  roads  which  date 
from  the  days  of  savage  occupancy.  And  if  one  deducts  disused 
roads  from  the  total,  I  have  my  own  opinion  that  1  per  cent,  is 
a  very  liberal  estimate.  Of  course  the  various  settlers,  immigrants, 
freebooters,  brigands,  the  aggregate  of  whom  is  implied  by  Juvenal 
in  his  word  of  three  letters,  settled  in  the  neighbom-hood  of  these 
primeval  roads.  Show  me  a  Eoman  villa,  and  I  am  sure  that  a 
Roman  road  will  be  found  near  it.  We  are,  some  of  us  at  least,  the 
heirs  of  a  multitudinous  experience. 

Now,  in  1773,  the  English  landowners  in  Parliament,  as  is 
natural,  seeing  that  they  were  dominant,  thrast  the  cost  of  main- 
taining those  roads,  the  existence  of  which  was  essential  to  their 
rent,  and  the  due  repair  of  which  was  nearly  as  essential,  on  those 
to  whom  the  repair  of  the  roads  was  even  more  important  than  its 
existence,  by  the  machinery  of  turnpike  tolls.  For  a  long  time  they 
got  the  tolls,  exempting  themselves  and  their  tenants  from  them, 
and  did  not  repair  the  roads.  But  as  stage  coaches  increased,  it 
was  seen  that  the  fruitful  contingency  of  tolls  depended  on 
adequate  repair  ;  and  in  some  cases,  even  on  a  few  miles  of  new 
road,  cutting  through  hills  and  bridging  over  low-lying  land. 
Some  specimens  of  this  later  engineering  may  be  seen  on  the  west 
and  south  roads  leading  out  of  this  city,  and  a  little  on  the  east. 
The  two  north  roads,  I  venture  on  asserting,  are  as  old  as  the  days  of 
the  ancient  Britons.  The  money  for  restoring,  and  in  certain  cases 
for  improving,  these  communications  came  from  private  subscribers; 
and  fifty  years  ago,  a  turnpike  trust,  though  its  duration  was  very 
properly  limited,  because  it  was  really  the  restraint  of  a  public 
right,  was  supposed  to  be  an  excellent  investment.  In  course  of 
time  the  receipts  from  the  tolls  fell  off,  for  a  more  rapid  and  cheaper 
means  of  transit  was  discovered  and  gradually  extended.  The  trusts 
were  renewed  after  the  term  was  expired,  but  in  vain  ;  for  it  was 
finally  discovered  that  the  tolls  payable  did  not  cover  the  cost  of 
collection.  There  was  nothing  to  be  done  but  to  refuse  to  renew 
the  trusts,  to  secularize  the  toll-houses,  and  to  leave  the  landowners, 
as  was  the  case  before  1773,  to  mend  the  roads  which  had  now 


492    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

become  in  the  main  their  interest  only.  In  less  than  a  century 
the  ancient  obligation  on  themselves,  which  they  had  striven  to 
shift,  and  with  success  on  the  mail  coaches  and  trade  waggons,  re- 
verted to  their  own  shoulders,  and  again  became  a  charge  on  land 
or  on  occupancy.  They  had  learned  how  important  an  aid  to  the 
rent  of  land  is  cheap  and  convenient  transit.  Hitherto  they  had 
got  it  at  other  folks'  cost.  Now  they  had  to  provide  it  at  their  own. 
The  situation,  as  the  landowners  encouraged  branch  railways, 
became  worse  and  worse,  for  though  the  roads  were  not  used  by  the 
carts  and  coaches,  and  therefore  presumably  lasted  the  longer,  the 
contributions  to  the  charges  gradually  disappeared.  It  became 
necessary,  either  to  pay  for  the  maintenance  themselves,  or  through 
the  tenants,  or  to  let  the  roads  get  out  of  repair,  or  to  find  some 
other  source  by  which  to  secure  a  good  road,  and  save  their  own 
charges.  They  hoped  for  a  time  that  a  renewal  of  the  trusts  would 
prove  efficacious,  and  when  they  were  disappointed  in  this,  they  re- 
viewed their  opportunities. 

Now  about  twenty  years  ago,  a  Committee  of  the  House  of  Com- 
mons, of  which  Mr.  Goschen  was  chairman,  was  nominated  for  the 
purpose  of  investigating  the  amount,  the  incidence,  and  the  equitable 
distribution  of  local  taxation.  The  committee  was,  as  usual,  talven 
from  the  two  traditional  parties  in  equal  moieties,  except  that  it  had 
a  bare  majority  on  the  side  of  the  existing  government,  a  rule 
which  is  observed  in  the  House  of  Commons  and,  perhaps,  explains 
the  singular  worthlessness  of  nearly  all  reports  made  by  select  com- 
mittees. The  committee  took  evidence  as  usual,  and  divided  on  a 
report,  drawn  up  as  usual  by  the  chairman.  Half  the  committee 
voted  in  favour  of  the  chairman's  report,  half  against  it.  and  the 
report  was  carried,  as  usual,,  by  the  chairman's  casting  vote.  I  may 
observe  that  in  recent  times  the  House  of  Commons  on  matters  of 
high  public  interest  steadily  stultifies  itself  in  this  absurd  fashion. 
In  consequence,  as  I  have  been  constantly  constrained  to  state  in 
the  House,  the  evidence  taken  by  the  committee  is  almost  invari- 
ably of  far  higher  value  than  the  report  issued,  which  purports  to  be 
an  adjudication  on  the  evidence.  It  is  needless  to  say  that  a  report 
carried  by  the  casting  vote  of  a  chairman  is  of  no  practical  force. 
Mr.  Goschen  had  nothing  left  for  him  but  to  issue  a  volume  of  his 
own  on  the  subject,  in  which  the  whole  matter  was  stated  with 


THE  COST  OF  POLICE,  498 

great  clearness,  and  the  principles  which  should  determine  the  dis- 
tribution of  such  taxation  were,  from  Mr.  Goschen's  point  of  view, 
advocated  with  great  cogency.  He  advised,  in  brief,  that  such  tax- 
ation should  be  divided  between  owner  and  occupier  in  equal 
moieties,  as  is  done  in  Scotland  and  generally  in  Ireland,  though  in 
the  latter  country  what  is  called  county  cess  is  imposed  on  occu- 
piers only.  I  shall  point  out  later  on  what  was  the  effect  of  Mr. 
Goschen's  publication. 

Up  to  comparatively  recent  times,  the  maintenance  of  the  peace 
in  town  and  country  was  imposed  upon  the  inhabitants  in  turns,  the 
office  of  constable  being  one  which  an  inhabitant  could  not  decline.. 
Even  in  the  city  of  London,  there  were  constables  appointed  in 
every  ward.  But  in  course  of  time,  it  was  seen  that  it  was  im- 
possible to  rely  on  these  gratuitous  services.  A  detective  force  had 
to  be  estabhshed  in  London.  Then  a  regular  police  was  instituted 
by  Sir  R.  Peel,  and  put  under  the  Home  Office,  when  its  duties 
were  outside  the  city.  Very  soon  the  system  of  the  London  poHce 
was  extended  to  other  large  towns,  and  finally  the  constable  of  the 
village  or  hundred  was  superseded  by  a  county  police,  and  paid  ser- 
vice substituted  for  a  quasi-voluntary  one.  The  ancient  constable, 
an  institution  alleged  to  be  coeval  with  the  common  law  and  in 
activity  within  my  own  memory,  is  now  as  obsolete  as  the  court  leet, 
by  which  he  was  originally  appointed,  and  whose  officer  he  was. 

Now  the  mamtenance  of  the  peace  and  the  arrest  of  oiBfenders, 
a  duty  still  imposed  in  theory  on  all  persons,  apart  from  the  form 
of  the  special  constable's  oath,  is  every  one's  interest,  and  if  it  be 
delegated  its  cost  should  be  defrayed  by  the  contributions  of  aU  who 
have  the  benefit  of  such  services.  On  no  pretext  whatever  should 
this  charge  be  defrayed  by  the  owners  of  land,  or  by  occupiers 
whose  liabilities  are  measured  by  the  use  of  agricultural  land.  It 
is  entirely  unfair  that  a  farmer  of  600  acres  should  pay  this  tax  on 
his  holding.  It  is  true  that  his  property  is  in  the  open,  and  is 
exposed  to  marauders.  But  it  is  quite  possible  that  another 
inhabitant  of  the  same  parish  may  have  as  much  property  in  his 
house  as  the  farmer  has  on  his  land,  and  not  be  liable  to  a  tenth  of 
his  payments.  He  may  have,  as  I  shall  show  hereafter,  much 
more  than  the  farmer  has,  and  not  be  rated  at  near  the  sum. 
Plainly  the  police  rate  should  be  defrayed  by  the  occupier,  and  the 


494    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

most  equitable  way  in  which  it  should  be  defrayed  is  by  a  house 
tax,  estimated  on  the  building  value  of  the  house.  If  a  man 
chooses  to  live  in  a  house  which  would  cost  and  did  cost  half  a 
miUion  to  build,  he  should  pay  on  that  hall  million  for  protection 
and  not  on  a  nominal  sum.  The  maintenance  of  the  poor  then,  in 
equity,  should  be  a  charge  on  the  employers  of  labour ;  the  main- 
tenance of  roads,  by  the  same  equity,  should  be  defrayed  at  the  cost 
of  those  who  own  landed  property.  The  maintenance  of  the  peace 
should  be  a  charge  on  occupation,  and  should  be  calculated  on  the 
cost  which  the  occupier  is  put  to  in  building  the  house  in  which  he 
thinks  proper  to  live. 

But  I  am  far  from  having  exhausted  the  charges  which  are 
included  under  the  general  head  of  local  taxation,  charges  which 
are  rapidly  becoming  a  tax,  the  aggregate  amount  of  which  is  con- 
siderably in  excess  of  the  whole  cost  of  government,  exclusive  of 
interest  on  the  debt,  sixty  years  ago,  charges  which  if  continued  at 
the  same  rate  bid  fair  to  rival,  at  no  remote  period,  the  imperial 
expenditure.  Much  of  the  outlay  is,  I  allow,  immediately  or 
indirectly  beneficial,  but  unfortunately  they  who  incur  the  cost  are 
very  frequently,  I  may  say  generally,  not  the  persons  who  obtain 
the  benefit.  On  the  contrary,  the  benefit  which  they  pay  for 
supplying  is,  inevitably  and  in  the  nature  of  things,  the  basis  of  a 
further  charge  on  themselves.  In  brief,  they  improve  another 
man's  estate,  and  are  called  upon  to  pay  a  subsequent  sum  on  the 
improvements  which  they  have  effected  at  their  own  cost.  Such  a 
result  must  ensue  by  basing  all  local  taxation  on  occupancy. 

One  ancient  tax,  contributed  by  all  occupiers  and  occupying 
owners,  as  I  have  shown  you  in  my  analysis  of  the  Tandridge  rate, 
is  the  charge  for  maintaining  prisons  and  hospitals.  Now  the 
detention  and  punishment  of  criminals  is  part  of  the  machinery  of 
police.  So,  though  in  a  less  obvious  manner,  is  the  case  of  lunatics. 
The  lunatic  is  kept  in  custody  because  he  has  either  committed  a 
criminal  offence  or  is  judged  likely  to  commit  one.  Now  the  charge 
of  his  maintenance  and  custody  should  be  defrayed,  as  the  police 
rate  should  be  defrayed,  by  the  contributions  of  all  occupiers,  and 
this  because  the  liberty  of  such  persons  is  a  danger  to  secure 
occupancy.  Besides,  it  is  a  matter  of  local  interest  that  the  causes 
of  excessive  local  crime  or  excessive  local  lunacy  should  be  studied. 


NATIONAL  EDUCATION.  496 

and  if  possible  remedied,  under  the  stimulus  of  having  to  pay- 
exceptionally  and  sensibly  for  the  local  evil. 

Becently,  the  state  has  wisely  determined  to  insist  on  the  com- 
pulsory education  of  all  classes.  It  is  seen  that  an  uneducated 
people  is  handicapped  in  the  industrial  competition  with  educated 
nations,  and  however  much  people  may  declaim  against  competition 
within  the  limits  of  any  one  particular  community,  it  is  plain  that 
no  law  can  prevent  its  operation,  and  that  in  all  its  force  in  the 
industrial  relations  of  any  two  communities  or  more,  and  that 
consequently  industrial  ignorance,  however  caused  (and  a  highly 
educated  nation  can  be  rendered  industrially  ignorant  by  protective 
laws)  is  a  bar  to  economical  progress  and  industrial  competition. 
Now  for  reasons  already  stated,  this  charge  should  be  a  national 
one,  for  the  primary  education  of  the  young  does  not,  by  the  very 
terms  of  the  hypothesis,  benefit  the  individual  nearly  as  much  as 
it  does  the  state.  It  might  be  paid  entirely  by  the  state.  It 
assuredly  should  not  be  paid  by  the  magnitude  of  the  occupancy. 
It  would  be  much  better  paid,  as  it  is  in  the  United  States,  by  a 
house  or  property  (not  income)  tax,  and  the  control  of  it  should  be 
in  the  hands  of  local  committees,  instead  of  being  based  on  foohsh, 
frantic,  and  mischievous  examinations. 

But  by  far  the  most  formidable,  and  on  the  whole  least  defensible, 
forms  of  local  taxation  remain.  The  researches  of  modem  science 
have  shown  that  the  health  of  a  community  must  be  considered  in 
the  supply  of  pure  water,  and  in  the  adequate  elimination  by  sewage 
works  of  unwholesome  and  dangerous  matter.  A  district  should 
not  be  declared  habitable,  or  allowed  to  be  occupied  with  houses,  in 
which  pure  water  is  not  forthcoming,  and  dirt  is  not  effectually 
removed.  Under  the  same  rule  overcrowding  should  not  be  per- 
mitted, the  building  of  unwholesome  houses  should  be  forbidden, 
and  in  general,  the  public  health  should  be  consulted.  But  the 
restraint  on  overcrowding  and  what  is  called  jerry  building,  a  term 
I  believe  imported  from  the  other  side  of  the  Atlantic,  is,  like  the 
inspection  of  food,  a  matter  of  poUce,  and  should  be  defrayed  as 
other  police  liabiUties  should  be. 

But  the  supply  of  water  and  the  removal  of  sewage  are,  or 
ought  to  be,  permanent  charges  on  the  owner  of  habitable  land.  By 
the  laws  of  sanitary  science,  and,  what  is  more  important,  for  the 


496    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

purposes  of  economical  inquiry,  building  land  is  or  should  be  of  no 
more  value  than  ordinary  agricultural  land,  if  these  conditions  are 
not  complied  with.  It  was  from  ignorance  only  that  they  were  not 
made  obligatory  by  early  English  law.  In  the  city  of  London  the 
supply  of  water  reputed  to  be  pure  was  imposed  on  the  civic 
authorities,  and  assistance  was  accorded  to  them  for  the  purpose, 
The  city  estate,  which  lies  west  of  St.  James'  Street,  was  granted 
to  the  Corporation  in  early  times,  in  order  that  it  should  contain 
reservoirs  for  the  City  supply  of  water,  the  streams  formerly  utilized 
for  the  purpose  at  Paddington  being  now  diverted  into  the  Serpen- 
tine. In  equity  then,  and  on  economical  grounds,  the  supply  of 
pure  water  and  the  removal  of  sewage  matter  should  be  a  charge 
on  building  land. 

The  greater  part  of  the  local  debt,  which  now  figures  as  so 
serious  an  item  in  local  budgets  is  due  to  these  permaneut  improve- 
ments. In  most  cases  the  debt  is  terminable,  that  is,  the  occupiers 
are  constrained  to  pay  off  principal  and  interest,  and  as  I  have 
stated,  are  engaged  in  benefiting  an  estate,  the  owners  of  which 
can  and  will  make  them  pay  interest  on  the  improvement  which 
they  have  effected  at  their  own  cost.  The  same  reasoning  applies 
to  workhouses,  to  prisons,  to  county  halls,  and  a  host  of  other 
permanent  structures  created  out  of  the  occupiei-'s  money  for  the 
landowner's  benefit.  It  is  not  easy  to  conceive  a  system  which 
more  completely  offends  against  every  canon  of  economical  equity. 
If  outlay  is  beneficial,  immediately  or  indirectly,  it  ought  to  be 
defrayed  by  those  who  secure  the  benefit. 

But  this  is  not  all.  The  property  which  is  liable  to  a  rate  is 
assessed  by  the  local  authorities  either  in  person  or  by  deputies. 
But  there  is  an  appeal  from  the  judgment  of  the  assessor  to 
Quarter  Sessions.  The  rating  Act  of  William  IV.  bids  the  Court 
of  Appeal  take  into  account  the  fair  letting  value  of  premises,  a 
direction  which  is  entirely  equitable  in  nearly  all  cases.  But  it 
is  not  equitable  in  the  very  class  of  cases,  in  which  the  justices 
in  Quarter  Sessions  are  generally  interested,  viz.,  their  own  houses. 
They  have  therefore  interpreted  the  clause  greatly  in  their  own 
favour,  and  county  mansions,  however  costly  their  construction, 
are  rated  at  nominal  sums,  on  the  plea  that  their  letting  value  is 
an  unknown  quantity.     The   Quarter  Sessions  shrinks  from  the 


MODERN  EXPEDIENTS.  497 

logical  conclusion  of  its  own  premises,  which  should  be  that  they 
must  not  be  rated  at  all,  and  attempts  a  compromise.  There  is 
nothing,  I  believe,  which  has  excited  more  universal  condemnation 
than  this  evasion  of  an  obvious  duty.  There  is  no  practice  more 
dangerous,  for  the  most  powerful  stimulant  to  socialism  is  the 
conviction  that  the  forces  of  government  are  perverted  to  the 
interests  of  a  particular  class.  When  my  friend  Lord  Wemyss 
declaims  against  socialism  at  St.  Stephen's  in  the  Lords,  it  is  only 
wise  to  trace  the  circumstances  to  which  this  movement  which  he 
stigmatises  owes  its  origin.  Li  England  socialist  opinions  are 
expressions  of  discontent  at  existing  and  indefensible  practices, 
not  an  organization  directed  against  the  very  foundations  of 
economical  progress. 

Two  manifestations  have  lately  been  made,  indirectly  attacking 
the  existing  system  of  local  taxation  in  England.  One  of  these  is  the 
enfrsmchisement  of  leaseholds  by  a  compulsory  process,  the  other 
is  the  special  taxation  of  ground  rents.  The  first  is  intended,  it 
seems,  to  obviate  the  consequences  which  ensue  from  the  artificial 
preservation  of  family  interests  under  the  forms  of  a  settlement 
of  land,  the  second  is  an  assault  on  the  principle  which  levies  all 
local  taxation  on  the  occupier.  Now  nothing  excuses  the  former, 
except  it  be  that  it  purports  to  supply  a  remedy  for  an  existing 
practice  which  is  believed  to  be  mischievous,  unless  it  also  urges 
that  in  a  densely  peopled  country,  everything  which  distributes  real 
estate  is  to  be  commended,  everything  which  accumulates  it  is  to  be 
discouraged.  It  is,  however,  open  to  some  doubt  whether  the 
strict  enforcement  of  sanitary  conditions  is  not  a  better  remedy 
against  the  owners  of  house  property  and  builduig  land,  than  com- 
pulsory sale  as  a  remedy  against  accumulation.  In  the  United 
States  such  accumulation  is  not  only  discouraged  by  public  opinion, 
but  by  the  more  drastic  efifect  of  levying  local  taxation  to  the  full 
on  all  lands  and  tenements,  whether  void  or  occupied,  and  by 
putting  this  taxation  entirely  on  the  owner.  But  the  condition  of 
workmen's  houses  in  the  States,  to  judge  from  the  latest  report  in  the 
State  of  Pennsylvania,  is  worse  than  in  any  civilized  country,  and  the 
rents  are  enormous.  Of  course,  there  is  much  which  is  exceptional 
in  the  fiscal  system  of  America  to  account  for  this,  but  it  also 
impUes    that    facilities    for    acquiring    ownership,    undoubtedly 

33 


498    CHABACTEB  OF  LOCAL  TAXATION  IN  ENGLAND, 

present  in  the  States,  do  not  inevitably  lead  to  beneficial 
results. 

The  special  taxation  of  ground  rents,  except  as  a  remedy  to  the 
unfairness  of  levying  local  taxation  on  occupiers  only,  and  as  part 
of  the  theory  of  progressive  taxation,  a  very  agreeable  topic  in  the 
economical  analysis  of  finance,  is  an  attempt  to  levy  a  special  tax 
on  a  special  kind  of  fertility.  Fertility,  among  political  economists, 
represents  those  exceptional  advantages  which  particular  pieces  of 
income-bearing  land  possess,  by  reason  of  their  yielding  a  larger 
return  to  the  possessor  than  other  pieces  do.  In  ground  rents 
this  is  proximity  to  the  market.  The  ground  rent  of  a  plot  in 
the  city  of  London  is  exceptionally  high,  because  the  occupation 
of  it  gives  exceptional  advantages  for  carrying  on  a  profitable 
business.  It  may  be  just  and  prudent,  as  Mr.  Mill  alleged,  to  levy 
special  taxes  on  accidental  fertility,  i.e.,  such  fertility  as  is  in  no 
sense  the  creation  of  the  owner,  and  is  due  to  the  recognition  by 
others  of  the  exceptional  advantages  which  the  site  yields.  But 
to  be  just,  the  same  liability  should  be  extended  to  every  kind  of 
exceptional  and  spontaneous  advantage,  and  in  the  analysis  of 
economical  fertility,  it  is  by  no  means  easy  to  determine  what  is 
spontaneous  and  what  is  consciously  acquired,  even  in  the  pos- 
session of  land.  Purchasers  may,  by  reason  of  their  own  acuteness, 
anticipate  the  pressure  of  demand,  and  subsequently  stimulate  it. 
Are  they  to  be  exceptionally  taxed  because  they  have  been  ex- 
ceptionally acute  or  farseeing  ? 

After  the  publication  of  Mr.  Goschen's  work,  in  which  the 
author  advocated  the  equal  partition  of  local  taxation  between 
owner  and  occupier,  the  landowners  in  Parliament  became  alarmed. 
It  is  constantly  alleged  that  the  payment  of  local  taxes  by  occupiers 
is  merely  an  indirect  payment  by  owners,  and  that  if  the  owner 
paid  them  in  the  beginning,  the  tenant  would  pay  them  in  thfe  end. 
But  this  contention  proves  too  much.  If  it  be  true,  no  harm 
would  acrue  to  the  owner  if  he  did  pay  them  in  the  beginning, 
a  reversal  of  practice  to  which  owners  show  a  very  rational  re- 
pugnance. Besides,  if  Parliament  transfers  any  tax  from  owner 
or  occupier  to  the  consolidated  fund,  it  is  inevitable  that  pro  tanto^ 
a  present  is  made  to  the  owner  out  of  the  public  taxes,  and  no 
boon  whatever  is  bestowed  on  the  occupier  by  such  a  lightening  of 


LOCAL  TAXATION  SUBSIDISED,  499. 

local  taxation,  for  the  hypothesis  is  that  the  landowner  can  and 
will  exact  all  the  remission  in  an  increased  rent.  But  such 
reasoning  impHes  that  the  landowner  has  a  power  of  enhancing 
the  rent  at  his  pleasure,  a  position  which,  if  it  were  affirmed  and 
beheved,  would  be  an  unanswerable  argument  for  regulating  aU 
rents,  however  voluntary  in  appearance,  by  the  state.  In  fact,  he 
has  no  such  power,  as  recent  experience  is  proving,  in  the  decUne, 
not  of  agricultural  rents  only,  but  in  the  slower  reduction  of  house 
rents.  The  value  of  building  sites,  and  of  houses  erected  on  them, 
is  determined  by  the  ordinary  laws  of  value.  It  is  subjective,  i.e., 
it  lies  m  the  discretion  of  the  occupying  applicant,  not  objective, 
i.e.,  in  the  will  of  the  consenting  owner,  unless,  of  course,  the 
state  assists  him  to  some  extent  in  fixing  a  monopoly  price. 

The  parliaments  of  1868  and  1874  began  the  transference  of 
considerable  masses  of  local  taxation  from  the  occupier  to  the 
consolidated  fund.  AU  the  charges  of  prisons  were  transferred  in 
this  way,  all  the  charges  of  lunacy,  and  a  notable  amount  of  the 
charges  on  roads.  These  were  ancient  liabiHties  on  land,  and  on 
the  profit  of  its  use.  Since  the  date  at  which  this  practical 
answer  to  Mr.  Goschen's  suggestion  was  made,  no  new  tax  of 
a  substantial  kind  has  been  imposed  ;  some  have  been  reduced, 
and  very  urgent  demands  in  the  interest  of  manufacturers  have 
been  put  forward,  especially  for  the  reduction  or  abohtion  of  the 
taxes  on  gold  and  silver  plate,  and  on  the  use  of  carriages,  taxes 
alleged  to  be  exceedingly  injurious  to  two  British  manufactures.  I 
have  already  referred  to  the  budget  of  1885  and  its  failure.  As  a 
consequence,  these  remissions  have  been  made  entirely  at  the  cost 
of  those  who  pay  income  tax;  and  when  1  investigated  the  subject, 
and  based  a  motion  in  the  House  of  Commons  on  it  near  two  years 
ago,  I  found  that  haK  the  income  tax  had  become  a  subvention  to 
local  taxation,  and,  according  to  the  ordinary  interpretation,  to 
landowners,  in  relief  of  traditional  charges. 

Some  of  the  burden  of  local  taxation,  indeed  of  any  taxation, 
must  rest  on  the  person  who  first  pays  it.  This  is,  I  believe,  the 
case  even  in  those  excise  and  customs  duties  which,  on  the  theory 
of  finance,  are  transferred  from  dealers  to  customers.  I  do  not 
otherwise  understand  the  unanimously  expressed  grievance  of  the 
tobacco  dealers  at  Sir  Stafford  Northcote's  increased  tobacco  tax  in 


500    CEAEACTEB  OF  LOCAL  TAXATION  IN  ENGLAND. 

1878,  since  remitted,  or  the  equally  unanimous  anticipation  of  what 
the  effect  of  the  increased  beer  tax  in  the  budget  of  1885  would  be 
on  the  profits  of  brewers.  The  power  of  transferring  a  tax  is  one  of 
degree.  It  is  greatest  when  the  person  who  primarily  pays  it  bases 
his  calling  on  further  relations  with  a  body  of  consumers,  and  this 
quite  apart  from  the  check  to  business  which  increased  taxation  has 
a  tendency  to  produce.  It  is  least  when  the  person  who  pays  it 
first  has  no  further  relation  w^ith  customer  and  consumer,  and 
therefore  has  his  power  of  transmission  hindered  ab  initio.  And  so 
I  conclude  that,  if  a  moiety  of  local  taxation  were  paid  by  the 
owner,  and  the  other  moiety  by  the  occupier,  on  the  principle  laid 
down  by  Mr.  Goschen,  the  former  would  almost  certainly  be  dis- 
abled from  transferring  his  tax,  and  the  latter  would  not  be  much 
affected  in  all  new  transactions. 

"With  these  views,  and  on  these  grounds,  I  made  my  motion  in  the 
House  of  Commons  on  March  23, 1886,  when  I  proposed  that  for  the 
future  local  taxation  should,  as  in  Scotland  and  Ireland,  oe  divided 
into  moieties,  of  which  the  owner  should  contribute  one  part,  the 
occupier  another,  power  being  given  to  the  occupier  to  deduct  the 
owner's  moiety  from  his  rent.  This  motion  I  carried  by  a  majority 
of  forty,  after  a  prolonged  debate.  In  less  than  three  months,  the 
decision  of  the  House  of  Commons  was  followed  by  a  political 
cataclysm.  But  I  have  no  doubt  as  to  what  the  solution  of  the 
question  will  hereafter  be,  and  that  the  precedent  of  1886  wiU  be 
followed  in  the  settlement  of  a  system  which  is  still  exciting 
increasingly  grave  discontents. 


xxni. 

THE  POLICY  OF  GOVEENMENT  IN  UNDEBTAKING  SERVICE 
AND   SUPPLY. 

TJie  tendency  of  government  to  extend  its  functions,  and  its  motives — 
The  economist  and  the  politician — The  Post  Office  and  its  manage- 
ment— The  purchase  of  the  telegraphs — Jealousy  at  the  functions 
of  government — The  construction  of  railways  in  England — The 
United  States  and  the  Eu/ropean  continent — Arguments  for  and 
against  their  acquisition  by  the  state — Mr.  MilVs  scheme  for 
making  the  state  a  universal  landlord — The  practice  of  Parliament 
in  maTcing  purchases  or  sanctioning  them — Government  as  a  pro- 
ducer— Dockyards — The  defence  of  the  system — The  frauds  of 
contractors — Precautions  against  them. 

There  is  always  a  disposition  on  the  part  of  governments  to  allege 
that  the  Administration  can  carry  out  the  business  of  private  life 
and  private  action  better  than  individuals  can.  I  have  illustrated 
to  some  extent  this  habit  of  mind  on  the  part  of  more  oi  less 
permanent  officials  in  my  lecture  on  the  limits  of  laissez  faire. 
I  have  given  some  account  of  the  facts  which  bring  about  or  justify 
this  tendency  in  the  last  lecture  on  the  origin  and  development  of 
local  taxation.  Now  the  general  inclination  of  governments  to 
undertake  such  functions  is  partly  due  to  fear,  partly  to  conceit. 
There  are,  and  will  be,  occasions  on  which  administrations,  justly 
dreading  critici-sni,  wish,  as  far  as  possible,  to  keep  certain  processes 
of  action  entirely  in  their  own  hands.  In  Europe  at  present  nearly 
all  railways  from  the  Rhine  to  the  border  of  Asia  owe  their 
initiative  and  their  control  to  government.  They  are  primarily 
the  mechanism  for  military  concentration.      Again,  it  is  natural 


602  THE  POLICY  OF  OOVEBNMENT, 

for  an  administration  which  represents  the  will  or  intelligence  of 
the  central  authority  to  affirm  that  the  limits  of  its  action  should 
be  extended,  that  it  may  prudently  be  entrusted  with  details,  and 
be  allowed  to  supersede,  or  at  least  to  control,  spontaneous  efforts. 
It  must  be  allowed  that  the  results  of  this  meddlesomeness  are  not 
reassuring.  I  have  only  taken  one  instance  of  the  love  of  interfering 
in  a  part  of  Europe.  The  consequence  has  been  that  the  inevitable 
errors  or  disappointments  of  government  are  open  to  destructive  and 
malignant  criticism ;  that  powerful  statesmen  have  had  to  oscillate 
between  deference  to  domestic  discontent  and  deference  to  foreign 
authority,  sometimes  to  make  friends  with  the  red  international, 
sometimes  with  the  black,  sometimes  with  the  yellow;  and  that 
in  those  parts  of  Europe,  where  the  initiative  has  been  taken 
incessantly,  the  authorities  have  as  incessantly  been  met  with 
anarchy. 

It  is  much  better,  even  if  they  disobey  it  in  spirit,  for  govern- 
ments, in  the  letter  at  least,  to  acknowledge  that  they  are  acting 
under  a  popular  mandate.  The  effect  is  that  by  doing  so  they 
obviate  any  criticism  beyond  that  of  having  misconceived  their 
mission,  and  experience  tells  us  that  an  error  in  generalities  is  more 
readily  pardoned  than  one  in  details.  I  remember  some  time  ago 
that  an  old  general  with  whom  I  had  a  slight  acquaintance  told  me 
that  he  had  been  once  appointed  governor  of  a  Crown  colony,  in  which 
the  function  which  he  held  was  coupled  with  that  of  being  Lord 
Chancellor,  or  principal  judge  in  equity.  He  waited  on  the  minister 
to  whom  he  owed  his  place,  and  expressed  his  doubts  as  to  whether 
a  person,  all  whose  experiences  were  military,  could  be  trusted  with 
purely  legal  functions,  and  was  assured,  by  being  told  that  as  long  as 
he  gave  no  reasons  for  his  legal  decisions,  he  had  no  cause  for  alarm. 
Now  this  is  not  a  satire  on  law,  but  an  eulogy  of  it,  because  it  alleges 
that  equity  is  natural  justice.  But  it  is  also  of  great  practical 
value,  for  as  long  as  you  let  your  neighbours  supply  reasons  for 
your  action,  you  are  in  a  far  safer  position  than  you  would  be  if 
you  gave  the  reasons  yourself.  And  by  parity  of  reason,  if  you  have 
to  state  the  grounds  on  which  you  take  up  a  particular  line  of 
action,  the  lines  of  action  should  be  as  few  as  possible.  I  am  per- 
suaded that  much  of  the  domestic  trouble  with  which  foreign 
governments  have  to  grapple  is  due  to  the  fact  that  they  have 


TEE  ECONOMIST  AND  THE  POLITICIAN.  503 

taken  so  many  initiatives,  and  have  given  so  many  disputable 
reasons  for  their  action. 

Now,  though  an  economist  should  abstain  from  the  criticism  of 
pohtical  action,  he  always  has  to  discuss  social  motives  and 
practices,  to  search  into  the  causes  which  bring  about  the  former, 
and  to  predict  the  consequences  which  follow  from  the  latter.  The 
economist  and  the  politician  are  equally  busied  with  human  society, 
but  the  function  of  the  economist  is  limited  by  observation  and 
analysis,  that  of  the  politician  is  to  proceed  to  action.  Public  men 
have  often  had  to  do  many  things  which  economists  naturally 
criticize.  Economists  have  been  known  to  draw  conclusions  which 
public  men  are  constrained  to  disregard,  or  perhaps  to  repudiate. 
Perhaps  the  principal  use  of  economical  inferences  is  that  which  is 
derived  from  what  I  am  in  the  habit  of  calling  negative  inductions, 
under  which  it  is  shown  that  premises,  in  the  first  instance 
seductive  or  attractive,  have  disastrous  effects.  Not  much  less 
valuable  are  the  positive  inductions,  by  which  it  may  be  shown 
that  private  rights,  admittedly  sacred  up  to  a  certain  point,  may,  if 
carried  to  excess,  inflict  serious  evils  on  society.  The  earliest 
economists,  notably  Adam  Smith  and  his  predecessors  in  France, 
chiefly  elaborated  negative  inductions.  The  best  efforts  of  their 
successors  have  been  directed  to  those  positive  inductions  which 
discover  the  strain  that  will  be  put  on  society  by  the  undue  accep- 
tance of  private  rights.  You  will  remember  that,  on  very  high 
authority,  modem  wTiters  of  a  more  rigid  school,  who  have  insisted 
on  the  acceptance  of  their  conclusions  in  practical  life,  have  been 
recommended  to  betake  themselves  to  Saturn. 

Now  I  have  made  this  short  preface  to  my  lecture  to-day  in  order 
to  point  out  to  you  that  a  prudent  administration  will  be  very 
cautious  in  either  directing  private  enterprise  or  in  rivalling  it. 
The  less  it  takes  in  hand,  out  of  its  legitimate  sphere,  of  adjudicat- 
ing, through  the  machinery  of  Parliament,  on  the  best  means  for 
reconciling  contending  claims,  the  less  does  it  invite  adverse 
criticism.  The  function  of  such  an  equitable  interpretation  is 
difficult  enough,  and  the  decision  will  constantly  be  challenged. 
But  it  has  to  be  made,  even  though  long,  and  perhaps  useful,  delay 
is  occasioned  by  the  collection  of  evidence.  But  to  undertake  many 
more  offices  than  that  of  a  judge  in  equity  on  the  principles  of 


504  THE  POLICY  OF  GOVERNMENT. 

legislation,  where  the  parliament,  with  the  administration,  is  com- 
petent to  take  evidence  and  arrive  at  a  decision,  is  the  acceptance 
of  a  function  which  needs  a  constant  apology.  Now,  there  are 
occasions  on  which  the  apology  is  complete,  and  the  public  admits 
that  government  has  rightly  appropriated  to  itself  the  supply  of 
certain  services.  It  is  much  more  disputable  whether  government 
is  ever  wise  in  undertaking  the  economical  function  of  production. 
Almost  all  the  evidence  as  to  the  latter  action  is  hostile  to  the 
practice.  An  examination  of  instances  is  the  best  means  of  arriving 
at  reasons  for  determining  on  general  rules. 

The  supply  of  a  service  is  best  illustrated  by  the  Post  Office. 
The  origin  of  this  institution  was  quite  as  much  a  measure  of 
police,  as  it  was  to  serve  a  commercial  convenience.  It  was 
instituted  under  Cromwell's  government,  and  the  Act  of  the 
Commonwealth  which  created  it  states  that  it  was  to  be  "  for  the 
benefit  of  commerce,  for  the  conveyance  of  government  despatches, 
and  for  the  discovery  of  wicked  »nd  dangerous  designs  against  the 
commonwealth."  The  Act  of  1657  was  ratified  at  the  Eestoration, 
and  the  Post  Office  soon  became  a  notable  source  of  royal  revenue, 
being  early  charged  with  pensions.  The  convenience  of  the  service 
was  great,  and  it  was  soon  made  compulsory,  the  rates  charged  for 
conveying  letters  being  very  high,  though  comparatively  slight 
when  contrasted  with  the  old  cost  of  sending  them  by  private 
hand.  In  course  of  time  the  Post  Office  profits  were  transferred  to 
the  general  revenue.  In  1840  the  rate  was  reduced  on  the  plea 
that  the  distribution,  and  not  the  weight  of  the  letter,  was  the 
principal  charge  on  the  service.  It  was  supposed  that  the  revenue 
under  the  new  system  would  soon  equal  the  amount'received  under 
the  old,  but  this  did  not  happen  till  after  the  lapse  of  a  consider- 
able time.  Hence  the  experiment  was  deemed  premature  by  Peel, 
who  foresaw  that  no  little  experimental  boldness  would  be  needed, 
in  order  to  get  rid  of  annual  deficits,  and  make  the  revenue 
elastic. 

The  economical  defence  of  the  Post  Office  system  is  that  a  service 
is  performed  by  the  government  with  a  punctuality,  dispatch,  speed, 
and  certainty  which  could  not  be  achieved  by  individuals  under  any 
competitive  system,  and  that  in  this  function,  at  least,  a  state 
monopoly  of  service  is  thoroughly  justified.     It  is  further  alleged, 


THE  POST  OFFICE,  606 

that  through  this  agency  a  cheap  service  is  carried  out  indeed,  but 
that  by  the  iact  of  the  monopoly  a  considerable  revenue  is  also 
acquired.  Now  it  is  highly  probable  that  a  considerable  part  of 
this  contention  is  correct.  The  government  was  anxious  to  secure, 
under  the  old  system>  a  notable  revenue.  But  however  thoroughly 
Parliament  would  have  granted  them  a  monopoly  of  collection  and 
distribution,  it  is  certain  that  the  results  to  the  government  would 
have  been  disappointing  if  those  ends  to  which  I  have  alluded  had 
not  been  satisfied,  and  that  the  Post  Ojffice  would  have  had  in- 
terloping rivals,  as  indeed  to  some  extent  they  did  have  under  the 
old  rates.  But  much  of  the  success  which  has  attended  the  Post 
Office  in  this  country  is  due  to  the  constant  public  criticism  to  which 
its  details  have  been  subjected  and  its  efficiency  examined.  This 
criticism,  too,  came  from  exactly  those  classes  whose  influence  any 
government  would  have  been  anxious  to  conciliate,  and  unwilling  to 
offend.  The  Post  Office,  in  short,  is  as  much  the  work  of  the 
people  as  it  is  of  government,  for  it  owes  its  usefulness  and  there- 
fore its  efficacy,  to  the  constant  supervision  it  submits  to. 

The  pecuhar  position  which  a  government  occupies  towards  the 
people  whose  affairs  it  administers  has  made  it  decline  to  become  a 
bailee,  that  is,  to  be  responsible  for  the  safe  delivery  of  that  which 
it  conveys.  The  fact  is  important,  as  it  shows  how  cautious  a 
government  should  be  in  competing  for  a  service  which  might  be 
satisfied  by  private  hands,  unless  it  has  an  exceedingly  strong  case 
to  show.  Now  it  is  part  of  the  Common  Law  that  a  common 
carrier  is  Hable  for  the  goods  which  are  entrusted  to  his  custody, 
though  this  Hability  has  been  from  time  to  time  limited,  unless 
special  terms  are  made  with  him  for  transmitting  articles  of 
extraordinary  value.  But  soon  after  the  Post  Office  was  instituted, 
as  early  as  the  reign  of  WiUiam  III.,  the  judges  decided  that  the 
Post  Office  was  not  Hable  for  the  safe  dehvery  of  letters,  and  the 
case  has  been  determined  again  to  the  same  effect.  The  reason,  I 
apprehend,  is  to  be  found  in  a  well-grounded  suspicion  that  the  Post 
Office  would  be  treated  more  harshly  by  juries  than  common  carriers 
would  be,  and  that  in  consequence  the  Habihty  must  be  entirely 
repudiated,  because  the  contingency  would  assuredly  be  abused. 
Even  now — when  the  business  of  the  Post  Office  has  been  so  greatly 
extended  in  several  new  directions,  now  that  it  has  become  banker, 


506  THE  POLICY  OF  GOVERNMENT. 

carrier,  is  made  an  annuity  office,  and  has  undertaken  the  trans- 
mission of  telegraphic  messages — it  still,  except  to  a  limited  amount 
and  under  certain  circumstances  only,  declines  to  acknowledge 
similar  liabilities  to  those  who  supply  analogous  services. 

The  difficulty  of  a  government  in  undertaking  a  public  service  is 
further  illustrated  by  the  purchase  of  the  telegraph  companies. 
The  government  was  anxious  to  obtain  the  monopoly  of  all 
messages  which  were  transmitted  by  electricity,  and  negotiated  the 
purchase  of  the  various  companies  which  had  hitherto  supplied  the 
want.  The  purchase  money  was  enormous,  and  out  of  all  propor- 
tion to  the  value  of  what  was  bought.  The  government  might 
with  perfect  justice  have  entered  into  the  field  of  competition  itself, 
and  have  forced  its  rivals  to  submit  to  more  reasonable  terms.  So 
high  was  the  price,  that  Mr.  Lowe,  then  Chancellor  of  the 
Exchequer,  told  me  that  he  was  strongly  disposed  to  throw  the 
whole  scheme  over,  for  that  the  bargain  gave  nearly  the  price  of 
consols  for  a  capital  and  plant,  which  would  require  to  be  replaced 
every  twelve  or  fifteen  years.  No  corporation  would  have  given  any 
such  price  for  that  which  the  nation  was  called  on  to  purchase. 
But  the  government  was  held  to  the  bargain  and  the  purchase  was 
effected.  There  is  no  entity  against  which  the  doctrine  of  vested 
rights  and  extravagant  compensation  for  compulsory  purchase  is 
pressed  with  so  much  energy  and  so  much  success  as  it  is  against 
the  Treasury ;  and  I  may  say  (till  recently,  when  I  had  the  satis- 
faction of  arresting  one  of  these  attempts)  with  such  ample,  such 
profuse  concessions  made  by  Parliamentary  authority,  when  the 
details  are  settled  by  a  committee.  "  The  revenue,"  says  Lamb, 
with  much  truth  as  well  as  humour,  **  is  an  abstract  which  I  don't 
care  much  about."  The  effect  of  this  bargain  is,  that  with  better 
facilities  than  any  other  country,  telegraphic  messages  are  dearer  in 
England  than  elsewhere,  and  the  receipts  from  the  service  hardly 
pay  interest  on  the  purchase  money. 

If  the  government  then  attempts  to  acquire  the  machinery  of 
an  existing  service  hitherto  supplied  by  private  enterprise,  it  has  to 
pay  an  excessive  price  for  the  acquisition.  K  it  attempts  rivalry  it 
is  met  by  the  most  jealous  obstruction,  and  very  effective  obstruc- 
tion too.  Experience  of  Parliamentary  procedure,  not  here  only, 
but  in  other  countries  as  well,  alone  can  mform  people  as  to  the 


THE  PUBCHASE  OF  THE  TELEGEAPH8,  507 

difficulties  of  remedial  legislation,  when  such  legislation  alarms 
existing  interests.  I  am  here  particularly  referring  to  postal  notes, 
and  to  deposits  in  Post  Office  savings  banks.  Now  there  is  con- 
siderable debate  about  the  expediency  of  issuing  a  small  note 
circulation.  The  advantages  are  that  it  saves  the  wear  of  a  gold 
currency,  and  is  a  convenient  means  of  transmitting  small  sums  by 
post.  The  objections  alleged  are  that  the  system  would  make  the 
reserves  of  bullion  so  much  the  less,  and  that  therefore  buUion 
operations  through  the  foreign  exchanges  would  be  subject  to  more 
frequent  fluctuations ;  that  the  tendency  of  such  a  circulation,  the 
paper  acting  as  money,  would  tend  to  artificially  heighten  prices, 
or  at  any  rate  to  induce  disturbances  in  value  which  would  be 
injurious.  Another  reason  which  I  do  not  remember  to  have  heard 
alleged  in  debate,  is  that  a  power  of  such  issues  conceded  to  private 
banks,  or  to  banks  having  a  power  of  local  issue,  would  bring 
persons  within  the  risk  of  loss,  who  had  no  interest  in  the  issuing 
bank,  and  no  means  of  checking  its  action,  that,  for  example,  in 
such  a  case  the  Warwickshire  working  men  might  have  been 
constrained  or  misled  into  taking  some  of  the  Greenways'  notes. 
These  difficulties  do  not  apply  to  the  issue  of  postal  notes.  But 
the  bankers  in  the  House  of  Commons  finally  constrained  the 
government  to  levy  a  heavy  commission  on  the  issue,  to  Hmit  the 
amount  of  the  note,  and  to  limit  the  time  of  its  legal  circulation. 
In  the  same  way  they  put  a  hmit  on  the  amount  of  deposit  which 
an  individual  might  make  yearly  with  a  post  office,  and  the  total 
amount  which  he  could  hold  in  the  form  of  security.  It  is  difficult 
to  avoid  the  conclusion  that  they  fancied  that  there  was  some 
danger  to  bankers'  deposits  in  the  change.  There  are  then  con- 
siderable difficulties  when  the  government  of  the  United  Kingdom 
undertake  a  competing  service.  It  is  certain  either  to  be  checked 
and  controlled  if  it  takes  the  initiative,  to  be  mulcted  if  it  attempts 
to  purchase. 

Less  jealousy  is  shown  to  corporations  which  undertake  service 
or  even  supply.  Parliament  would  not,  I  am  sure,  make  very 
satisfactory  bargains  upstairs  for  corporations  seeking  to  purchase 
compulsorily,  as  I  very  well  know  from  my  experience  on  com- 
mittees. But  generally  well-managed  corporations  negotiate  the 
terms  first,  and  come  to  Parliament  for  confirmation  only.    Besides, 


508  THE  POLICY  OF  GOVEBNMENT. 

if  they  have  any  local  powers,  they  have  that  of  competing  supply, 
and  such  a  power  greatly  expedites  negotiation.  Hence  it  is  the 
practice  with  corporations  to  undertake  supply.  They  have 
generally  purchased  or  created  gas  and  water  works.  Under  the 
impression  that  the  process  was  complete  enough  foi*  economical 
use,  they  obtained  some  two  or  three  years  ago  the  power  of 
supplying  the  electric  light.  But  a  little  reflection  will  show  why 
these  services  are  performed  more  satisfactorily  by  corporations  than 
they  would  he  by  government.  The  administration  is  more  close  to 
the  people.  Economies  in  administration  and  supply  are  more 
sensibly  and  more  immediately  felt,  and  the  machinery  of  local 
government  is  far  more  under  the  control  of  the  ratepayers  than 
the  expenditure  of  a  government  is  under  the  control  of  Parliament. 
The  policy  which  makes  the  existence  of  a  Parliament  depend  on 
the  acceptance  of  the  budget  and  the  estimates  confers,  in  my 
opinion,  powers  on  an  administration  which  are  not  in  the  public 
interest.  I  do  not  believe  that  municipal  afiairs  could  be  conducted 
with  any  continuity  or  certainty,  if  the  rejection  of  financial 
schemes  by  a  town  council  was  the  signal  of  its  dissolution  and 
re-election. 

Furthermore,  I  do  not  think  that  the  local  taxation  of  towns 
would  be  borne  with  patience,  if  the  economies  of  the  local 
authorities  were  subjected  too  entirely  to  vested  interests.  If  I 
made  myself  at  all  clear  to  you  in  my  last  lecture,  I  showed  you 
how  onerous  and,  on  economical  grounds,  how  indefensible  many  of 
them  are.  But  they  have  at  least  the  semblance  of  self-imposed  bur- 
dens. To  heighten  them  by  adventitious  charges  would  be  to  throw 
an  unwelcome  hght  on  their  incidence  and  their  equity.  I  am  ready 
enough  to  acknowledge  the  economy  of  the  quarter  sessions,  on 
which  the  advocates  of  the  system  dwell.  If  they  added  extra- 
vagance to  the  obvious  inconvenience  of  their  administration,  the 
institution  would  long  since  have  been  revised.  When  they  were 
entrusted  a  century  ago  with  the  function  of  fixing  the  labourer's 
wages,  they  found  it  an  exceedingly  unpopular  thing  to  issue  a 
considerate  scale. 

I  have  dwelt  on  the  case  of  the  Post  Office  and  its  details  at  some 
length,  and  have  touched  lightly  on  the  powers  which  corporations 
have  acquired  and  use  for  the  purposes  of  rendering  supply  and 


THE  CONSTRUCTION  OF  BAILWAYS.  609 

service  to  the  burgesses  of  municipalities,  m  order  that  I  may  deal 
from  one  point  of  view  only  with  another  pubHc  service.  I  shall 
reserve  to  a  separate  occasion  the  very  important  question  as  to  the 
control  which  the  state  should  exercise  over  the  means  of  travel  and 
the  carriage  of  commodities.  I  purpose  on  the  present  occasion  to 
merely  deal  with  that  of  the  acquisition  of  railways  by  the  state. 

In  England  railways  have  been  entirely  constructed  by  private 
enterprise  and  private  capital.  The  projectors  of  these  undertakings 
have  planned  them,  got  government  sanction  for  them  through  the 
two  Houses  of  Parliament,  procured  the  requisite  land  for  them, 
constructed  them,  enlarged  and  extended  them,  and  worked  them 
entirely  at  the  expense  of  the  shareholders.  The  nation,  through 
the  administration  and  Parliament,  has  given  or  granted  them 
nothing  whatever,  but  has  put  on  them  outrageous  and  indefensible 
expenses,  expenses  which  should  have  been  pubUshed  as  preliminary 
charges,  in  order  that  the  English  people  might  see  how  these  pub- 
lic undertakings  have  been  fleeced.  So  heavy  were  they,  that  we 
owe  to  them  that  railway  travelling  and  freight  are  necessarily 
higher  here  than  in  any  other  civilized  country.  In  no  other  has 
the  whole  cost  been  borne  by  private  enterprise.  Even  in  the 
United  States  the  government  granted  the  great  railways  large 
blocks  of  land  on  either  side  of  the  line,  the  subsequent  sale  of 
which  has  been  of  great  advantage,  while  in  the  United  Kingdom 
by  a  standing  order  of  the  Lords,  the  railways  were  jealously  ex- 
cluded from  getting  a  single  square  yard  beyond  what  was  needed 
for  their  way,  sidings,  and  stations,  so  that  they  have  often  had  to 
pay  heavily  for  the  very  fertility  or  adventitious  value  which  they 
have  created. 

In  France  the  land  was  given  by  the  state,  the  construction  of 
the  line,  property  in  which  was  conceded  for  a  long  term  of  years, 
being  the  work  of  private  enterprise.  In  Belgium,  Germany,  Italy, 
Spain,  &c.,  they  were  almost  entirely  constructed  by  the  state,  and 
are  under  state  control.  In  Russia  they  are  entirely  the  work  of 
government,  the  purpose  of  the  way  being  wholly  military.  In 
British  India  and  the  Colonies  they  are  the  product  of  British 
capital,  the  interest  on  the  loan,  sometimes  on  the  working  of  the 
railway,  being  guaranteed  by  the  Government  of  India  or  the 
Colonies.    They  are  nearly  all  the  work  of  the  last  fifty  years,  and 


510  THE  POLICY  OF  GOVEBNMENT, 

certainly  in  no  period  of  the  world's  history  has  so  much  capital 
been  advanced  and  expended  on  any  public  works  as  has  been  laid 
out  on  these  roads. 

Now,  there  are  many  persons  who  conclude  that  it  would  be  well, 
if  by  some  gigantic  operation,  these  undertakings  became  in  Eng- 
land the  property  of  the  state.  *'  The  operation,"  they  say,  *'is 
very  large,  but  it  is  an  operation  on  paper  only.  Bailway  transit," 
they  say,  **  has  so  completely  superseded  all  other  modes  of  convey- 
ing persons  and  goods,  that  it  is  not  only  a  necessity,  but  the 
public  is  as  much  in  debt  to  the  shareholders  of  railways,  as  if  the 
capital,  estimated  at  its  dividend-bearing  value,  were  inscribed  with 
the  rest  of  the  public  debt  in  the  books  of  the  Bank  of  England. 
Competition  of  any  serious  kind  with  the  great  lines  is  out  of  the 
question,  and  however  much  it  be  affirmed  in  theory  would  consti- 
tute, if  it  were  seriously  thought  of,  much  more,  if  it  were  put  in 
practice,  a  gross  breach  of  faith.  Nor  is  there  a  genuine  competition 
between  the  great  lines,  from  which  Parliament  expected  so  much. 
The  companies  have  found  out  that  competition  at  low  prices  is 
ruinous,  and  have  accepted  the  younger  Stephenson's  maxim  that 
where  combination  is  possible,  competition  ceases.  The  directors 
try  to  encourage  traffic,  cautiously,  but  with  growing  intelligence. 
They  put  their  fares  as  low  as  they  can,  for  they  know  that  high 
fares  check  travelling.  Their  only  competition  against  each  other, 
when  they  run  from  and  to  the  same  places,  is  that  of  who  shall 
convey  passengers  and  goods  with  the  greatest  rapidity  and 
punctuality.  In  England  the  railways  are  all  made,  and  the  use 
which  can  be  made  of  railways  has  been  exactly  tested.  We  know 
aU  that  we  want  to  know  about  them,  and  though  improvements  in 
detail  may  be  effected,  these  are  minor  matters  compared  with 
what  has  been  done.  Their  value,  estimated  from  their  earnuags 
and  dividends,  can  be  exactly  calculated." 

**  The  saving  of  cost,"  they  go  on  to  say,  **  consequent  on  the 
acquisition  of  railways  by  the  government  would  be  enormous. 
"Without  in  the  least  degree  curtailing  the  comfort  or  convenience 
of  passengers  and  traders,  a  great  economy  might  be  made  in  work- 
ing expenses,  by  -Weeding  out  superfluous  and  competing  trains. 
Why  in  the  world  should  a  train  from  London  to  Manchester  start 
and  arrive  at  exactly  the  same  time,  by  the  North-Westem  and  the 


STATE  OWNERSHIP  OF  BAILB0AD8.  611 

Midland,  and  arrive  at  exactly  the  same  time,  each  at  its  destina- 
tion ?  Again,  how  great  would  be  the  saving  in  getting  rid  of  these 
innumerable  boards  of  directors,  their  fees,  their  right  of  free  user 
over  all  the  lines  with  which  their  own  is  brought  in  contact.  One 
half  or  more  of  these  officials  could  be  disposed  of,  the  efficiency  in- 
creased, and  the  money  saved.  Then  agam.  Parliament  would  be 
rid  of  the  squabbling  over  the  various  Railway  Bills,  the  partisan- 
ship in  the  House  of  Commons,  the  imseemly  and  costly  struggles 
upstairs,  the  waste  of  the  Committees*  time  and  temper.  The  time  is 
ripe  for  the  conversion,  the  value  of  the  property  can  be  easily  ap- 
praised, and  the  pubhc  which,  as  you  say,  has  really  kept  the  Post 
Office  efficient,  would  have  as  extensive  and  as  healthy  an  influence 
on  the  railways." 

No  doubt  a  very  strong  case  may  be  made  out  for  the  transaction. 
But,  on  the  other  hand,  "It  is  a  very  serious  thing  to  hand  over  to 
the  administration  the  whole  mechanism  of  transit.  Nor  for  many 
reasons  is  the  case  of  the  Post  Office  and  that  of  the  railways  parallel. 
In  the  conveyance  of  letters,  distribution  is  everything,  nearness  and 
distance  are  almost  unimportant  factors.  In  railways  the  latter  are 
all  important.  Then  the  non-Hability  of  the  Post  Office  as  a  carrier 
is  a  minor  inconvenience,  but  life  and  property  would  be  seriously 
imperilled,  if  the  government  declined,  on  its  own  account,  those 
liabiHties  which  it  has  wisely  imposed  on  railways,  in  respect  oi 
passengers.  The  railway  authorities,  by  the  threat  and  by  the 
reahty  of  substantial  damages,  have  been  obliged  in  self-defence  to 
undertake  those  precautions  against  risk,  which  have  made  railway 
travelling  almost  the  safest  business  one  can  undertake.  They 
would  never  have  done  so  much  but  for  the  law.  Is  it  reasonable  to 
believe  that  a  government  official  will  be  influenced  by  these  alarms  ? 
Dividends  are  nothing  to  him,  and  the  government,  if  he  be  ever  so 
negligent,  will  be  pretty  sure  to  shield  him.  We  shall  rue  the  day, 
if  in  order  to  diminish  danger  and  lower  cost,  we  are  hereafter  called 
to  travel  at  the  German  rate,  thwarted  and  badgered  at  every  turn 
with  a  number  of  insolent  government  nominees,  who  will  consider 
their  places  to  be  freeholds,  and  use  us  as  such  officials  do  now, 
when  we  have  experience  of  them.  You  say  that  competition  is  re- 
duced to  that  of  dispatch,  punctuality,  and,  I  may  add,  uniform 
civility.     Are  we  to  expect  these  when,  on  undertaking  a  jou:cney, 


612  THE  POLICY  OF  GOVEENMENT. 

we  are  reduced  to  Hobson's  choice,  and  must  accept  what  an  officer 
chooses  to  offer  us  ?  We  shall  lose  more  than  we  gam  by  handing 
over  our  railways  to  a  central  government  office." 

**  Besides,  experience  and  prudence  teach  us  to  curtail  rather 
than  to  extend  the  functions  of  government.  Many  of  us  think  that 
centralization  has  been  carried  a  great  deal  too  far,  that  Parliament 
undertakes  what  it  cannot  possibly  carry  out,  that  in  consequence 
the  administration,  and  especially  the  permanent  officials,  are  the 
Legislature,  and  the  two  Houses  are  becoming  more  and  more,  the 
one  a  debating  society,  the  other  a  pageant.  The  proposal  which  you 
commend  will  enormously  increase  the  official  class,  will  put  one  of 
the  most  important  instruments  of  modem  society  into  the  hands 
of  the  government,  and  put  us  under  a  bureaucracy  with  a  witness. 
You  know,  since  Monk's  Bill  admitted  them  to  the  franchise,  how 
importunate,  how  insatiable  the  Civil  Service  is,  how  they  com- 
pete by  hundreds  for  the  least  vacant  place,  how  they  grumble  and 
sulk  about  their  pay  and  promotion  when  they  get  in.  Are  all  our 
railway  officials  of  the  future  to  have  freehold  offices,  as  they  will 
assuredly  claim  to  have  ?  Every  one  knows  what  trouble  there  is 
in  dockyards,  what  pressure  is  put  on  government  to  retain  useless 
hands  and  to  continue  useless  works.  Every  town  in  which  railway 
men  live  for  the  future,  supposing  your  scheme  be  adopted,  will  be 
a  focus  of  conspiracy  against  the  public  purse.  It  may  be  doubted, 
whether  the  economy  which  you  expect  from  abolishing  boards  of 
directors  will  come  to  much,  when  the  whole  of  these  new  officials, 
from  the  highest  to  the  lowest,  will  be  shouting  for  short  hours  and 
long  pay.  It  is  very  possible,  perhaps,  that  in  foreign  countries  offi- 
cials are  content  "with  moderate  salaries.  Perhaps  they  compensate 
themselves  by  ill  manners.  Our  experience  is  different.  We  shall 
certainly  have  to  pay  the  high  salaries,  and  are  pretty  certain  to  get 
the  bad  manners  into  the  bargain." 

"  You  say  that  the  value  of  these  properties  can  be  exactly  calcu- 
lated on  the  basis  of  their  past  earnings,  which  are  on  record.  But 
what  reason  is  there  to  believe  that  Parliament  will  accept  the  cal- 
culation as  the  basis  of  purchase  ?  If  it  does  it  will  go  against  all 
its  traditions.  It  has  long  acted  on,  and  can  hardly  refuse  to  con- 
tinue its  10  per  cent,  compensation  for  disturbance,  above  the 
valuer's  price.     It  was  prepared,  till  the  theory  was  overset  by  some 


THE  CASE  AGAINST  IT.  613 

of  ns,  to  take  into  consideration  the  clause  in  the  old  railway  Acts,  con- 
tained, we  believe,  in  all,  that  a  company  should  limit  its  dividends  to 
10  per  cent.,  as  a  pledge  that  such  a  maximum  should  be  taken  into 
account  in  dealing  with  minimum  earnings.  And  then  where  are 
you  to  get  your  valuer  ?  Is  it  to  be  a  gentleman  like  Mr.  E.  Smith, 
who  valued  plant  for  us  as  though  it  were  as  indestructible  as  matter, 
and  wanted  us  to  give  this  actuarial  value,  with  other  items  for  pro- 
perty that  was  not  worth  15  years'  purchase  at  best?  You  have  had 
experience  of  a  Parliamentary  purchase  in  the  telegraph  companies, 
is  it  likely  that  you  will  get  better  terms  with  the  railway  people  ? 
The  telegraph  stockholders  held  out  for  their  price,  and  the 
government  gave  in.  Is  the  railway  interest  less  strong  ?  The 
directorate  in  the  House  of  Commons  is  not  a  weak  body,  the  pro- 
prietary is  an  overwhelmingly  strong  one.  Outside  the  House  it  is 
not  to  be  trifled  with.  According  to  the  latest  returns  which  have 
been  furnished,  the  proprietors  of  stock,  shares,  and  debentures  have 
an  average  of  £14  a  year  from  their  holdings.  Of  course  much  of 
the  stock  is  held  in  large  masses.  If  the  conversion  is  to  take  place 
every  one  of  these  holders  will  be  on  the  alert  to  prey  on  the  govern- 
ment, and  to  insist  that  the  concession  should  be  favourable  to  him. 
The  prosperous  railways  will  point  to  their  solid  success,  the  un- 
prosperous  ones  to  their  public  services  and  to  their  deferred  hopes. 
As  it  is  they  can  blame  their  fortunes  or  their  directors,  but 
assuredly  they  will  look  to  government,  i.e.,  the  taxpayer,  to  make 
them  amends  for  what  they  have  lost,  if  the  conversion  is  to  come.'* 
The  arguments  which  I  have  given  you  in  this  sketch  for  and 
against  the  purchase  of  railways  in  the  United  Kingdom  by  the 
government  are  by  no  means  imaginary.  I  have  used  them,  I 
leave  you  to  conclude  which  way,  over  and  over  again,  during  the 
time,  not  passed  yet,  in  which  the  dissatisfaction  of  traders  with 
railway  freights  has  been  made  the  subject  of  one  or  two  abortive 
Bills,  and  is  like  to  be  the  subject  of  many  more.  But  I  venture 
on  predicting  that  if  government  seriously  inclined  to  the  pur- 
chase, and  hinted  that  the  traditionary  practice  of  Parliament 
would  be  followed  in  the  valuation,  the  hubbub  would  cease  as  sud- 
denly as  the  storms  raised  by  iEolus  was  when  Neptune  put  his 
head  above  the  waters.  But  whether  the  purchase  would  be  as 
satisfactory  to  the  nation  as  it  would  be  to  the  stock  and  shareholders, 

84 


614  THE  POLICY  OF  GOVERNMENT. 

and  whether  the  management  would  be  as  economical,  and  the 
service  as  satisfactory , to  the  pubhc,  is  a  question  on  which,  at 
present  I  believe,  opinion  decidedly  inclines  in  one  way. 

Some  years  ago,  my  late  friend,  Mr.  J.  S.  Mill,  seriously  proposed 
that  the  State  should  constitute  itself  the  universal  landlord  of  the 
British  Islands.  Of  course,  for  Mr.  Mill  was  by  no  means  disposed 
to  repudiate  the  rights  at  present  enjoyed  by  the  living  owners  of 
property,  though  he  had  very  strong  views  about  the  ownership  of 
intestate  estates,  he  conceived  that  the  acquisition  should  be  made 
on  the  basis  of  an  equitable  purchase,  in  which  the  full  value  of  his 
interest  would  be  given  to  the  dispossessed  owner.  In  the  valuation 
of  such  interests,  there  would  be  strong  claims  for  compensation  on 
the  ground  of  the  disturbance  of  traditional  associations,  in  the 
demand  for  which  the  men  who  have  done  nothing  but  disgrace 
their  ancestral  origin  would  be  as  loud  advocates  of  a  sentimental 
price  as  those  have,  whose  personal  merit  is  as  great  as  that  of  any 
ancestor  with  whom  their  holding  is  associated.  Now  when  under 
the  law,  say  for  a  street  improvement,  a  tenement  in  which,  to  the 
scandal  of  municipal  or  other  authority,  human  beings  have  to  live, 
but  pigs  should  not  be  housed,  had  to  be  appropriated  for  pubhc 
works,  the  owner  of  the  abommation  obtained  over  and  above  the 
valuation  price,  never  lower  than  the  true  price,  10  per  cent,  for 
disturbance,  and  tiU  recently  a  valuation  based  on  the  rent  which 
he  or  his  sub-lessee  contrived  to  extract  from  misery.  I  have  no 
doubt  that  Parliament,  if  we  assume  that  the  scheme  came  within 
a  reasonable  prospect  of  completion,  would  lean  to  its  traditions, 
and  that  the  nation,  if  Mr.  Mill's  plan  had  been  adopted,  would 
have  had  to  pay  fully  20  per  cent,  above  the  existing  value  of 
the  property.  I  say  nothing  here  about  the  wisdom  or  justice  of 
the  various  Irish  Land  Acts ;  but  any  one  who  studies  the  claims 
put  forward  at  the  landowners'  conference  can  form  an  estimate 
from  the  demands  made  on  the  part  of  men,  who  have  not  a  shred 
of  Parliamentary  influence  left,  what  would  be  expected  by  those 
who  still  have  and  are  like  to  have  a  great  deal  of  Parliamentary 
influence. 

I  have  no  doubt  as  to  what  were  the  motives  which  induced  Mr. 
Mill  to  contemplate  this  gigantic  operation.  He  knew  that  the  rent 
of  all  kinds  of  land  available  for  human  occupation,  agricultural 


MB.  MILL  AND  TEE  LAND,  515 

and  other,  had  risen  from  the  remotest  time  for  which  there  was 
any  evidence  in  this  country,  and  that  it  was  rising  still.  He  knew 
that  the  rise  of  rent  was  due  to  the  increase  of  demand  for  land,  and 
he  concluded,  with  Ricardo,  that  this  resulted  from  the  pressure 
of  population,  and  the  law  of  diminishing  returns,  when  some  of  us 
had  begun  to  see  that,  given  free  trade  in  food,  of  which  Mr.  Mill 
was  a  staunch  advocate,  the  cause  in  the  rise  of  rent,  whatever  it 
might  be  of,  was  due  to  the  expectation  of  increasing  profit,  that 
hitherto  trade  and  agricultural  profits  had  been  progressive  or 
seemed  to  be  progressive,  and  that  in  consequence  there  was  a 
steady  competition  for  occupancy.  Believing,  then,  that  rent  was 
increasing  by  reason  of  the  increase  of  demand,  and  believing  that 
as  population  increased,  the  demand  would  be  still  more  keen,  he 
treated  as  unimportant  or  less  important,  the  continuity  of  trade 
and  agricultural  profit,  and  the  consequent  necessity  that  capital 
and  skill  must  be  attracted  to  these  callings,  and  must  be  provided 
with  obvious  and  adequate  guarantees.  He  never  contemplated 
the  case  of  agricultural  capital  being  destroyed  by  the  mixed  opera- 
tion of  the  tenant's  ignorance  and  the  landlord's  cupidity,  and  with 
it  the  skill  which  makes  a  profit  and  therefore  makes  a  rent.  Now 
Mr.  Mill  was  ready,  being  an  entirely  just  man,  to  recognize  the 
present  value  of  a  monopoly  rent.  He  was  under  the  impression 
that  it  would  go  on  increasing  in  the  future,  and  he  gave  the  name, 
now  historical  in  more  senses  than  one,  of  the  unearned  increment 
to  this  future  growth.  In  order  to  secure  this  future  increment, 
he  recommended  its  present  purchase.  He  propounded  his  scheme 
in  London  more  that  twenty  years  ago,  and  asked  me  to  come  and 
support  him.  I  told  him  that  I  thought  him  in  the  wrong,  and  he 
pressed  me  the  more  to  come  and  attack  him.  I  did  so  to  the  best 
of  my  power,  though  I  did  not  then  possess  a  tenth  part  of  the 
information  which  I  have  since  collected  as  to  the  history  and 
development  of  rent. 

One  can  of  course  be  wise  after  the  event,  and  every  one  can  see 
that  if,  more  than  twenty  years  ago,  Mr.  Mill's  scheme  had  passed 
into  the  region  of  practical  politics,  the  purchase  would  have  been 
disastrous,  nay  ruinous,  to  the  people  of  the  United  Kingdom,  and 
that  probably  popular  discontent  would  have  led  to  the  bargain 
being  repudiated.    I  do  not  pretend  to  assert  that  I  foresaw  the 


516  THE  POLICY  OF  GOVERNMENT, 

fall  of  rents,  consequent  on  bad  harvests  in  England,  decreasing 
agricultural  capital,  discouraged  skill,  and  cheap  freights.  I  did 
not,  till  I  learned  twelve  years  ago,  how  much  agricultural  capital  had 
already  shrunk,  foresee  the  inevitable  issue,  and  then  foresaw  it  only 
in  part.  But  more  than  twenty  years  ago,  I  had  learned  that  the 
Eicardian  theory  of  rent  was  a  metaphysical  conclusion,  that  its 
progress  and  even  its  continuity,  under  free  trade,  was  due  to 
an  intelligible  but  precarious  set  of  conditions,  in  which  the  fertihty 
of  land,  the  pressure  of  population,  and  the  law  of  diminishing 
returns  played  but  an  unimportant  part,  and  that,  very  possibly, 
the  unearned  increment  of  the  future  was  entirely  hypothetical  and 
probably  visionary,  certainly  too  doubtful  to  admit  of  being  made 
the  basis  of  a  gigantic  operation. 

But  let  us  suppose  that  the  unearned  increment  had  gone  on 
increasing,  that  the  purchase  had  been  made  on  reasonable  terms, 
and  that,  on  the  whole,  the  dispossessed  landowner  would  have  been 
glad,  at  the  present  time,  to  recover  his  property  on  the  terms 
of  a  compulsory  purchase  made  twenty  years  ago.  "What  would 
have  been  the  situation  ?  The  cultivation  of  the  soil  would  have 
exchanged  a  landlord,  who  is,  after  all,  a  human  being,  with 
sympathy  and  consideration,  at  least  at  times,  with  some  desire 
to  live  at  peace  and  goodwill  among  his  neighbours,  for  a  govern- 
ment office,  the  servants  of  which,  by  a  very  natural  impulse, 
would  manipulate  the  whole  estate  by  a  set  of  hard  inelastic  rules. 
They  would,  by  the  very  nature  of  their  duties,  be  unaffected  by 
all  sympathetic  influences.  Their  first  object  would  be  to  earn 
the  interest  on  the  purchase  money,  and  to  insist  on  its  punctual 
payment,  come  what  would.  The  business  of  the  office  would 
be  enormous,  and  prodigiously  costly.  The  farmers  of  the  state 
lands  would  get  no  mercy,  and  as  for  the  unearned  increment, 
if  it  had  gone  on  even  in  the  way  that  farmer's  rents  rose  between 
1853  and  1873,  it  would  have  been  entirely  swallowed  up,  in  the 
costs  of  the  office.  Even  under  the  present  system,  the  tenant 
of  Crown  lands  is  by  no  means  the  most  contented  of  farmers, 
the  rent  of  Crown  lands,  by  no  means  cheaply  collected.  Under 
the  proposed  scheme,  the  tenants  would  soon  be  in  rebellion,  and 
the  English  plan  of  campaign  would  be  far  more  minatory,  than 
the  project  which  bears  that  name  in  Ireland.     Even  the  worst 


FUBCHASE8  BY  PABLIAMENT.  617 

landlord  has  some  knowledge  of  his  property  and  its  capabilities, 
the  state  landlord  has  no  knowledge  but  what  he  pays  for. 

This  is  by  no  means,  however,  the  whole  case.  Governments  are 
essentially  weak,  that  is,  they  are  peculiarly  open  to  indirect 
influences,  and  those  governments  which  make  the  greatest  show 
of  firmness,  weakest  of  all,  because  to  be  firm  with  one  set  ot 
people  makes  it  necessary  to  conciliate  another  set.  For  in  an 
administration,  the  law  of  self-preservation  is  exceedingly  keen, 
and  the  means  which  would  be  adopted  for  self-preservation,  which 
might  be  disdained  by  an  individual,  represent  only  a  divided 
responsibility  in  a  government,  to  say  nothing  of  the  fact  that, 
under  the  exceeding  leniency  of  our  pohtical  system,  even  the  crimes 
of  a  government  now  go  entirely  unpunished.  As  a  consequence, 
the  new  land  ofiSce  would  swarm  with  jobs.  I  feel  convinced  that 
the  virtue  of  no  ParHament  would  resist  the  temptations  which 
would  aggregate  in  a  land  office,  which  would  be  professedly  the 
only  landowner  in  the  kingdom,  which  would  be  managed  indeed 
by  clerks  and  surveyors,  but  would  be  manipulated  by  the  adminis- 
tration. Even  the  Woods  and  Forests  office  has  been  charged 
with  the  gravest  scandals,  with  the  offence  of  corrupt  favouritism, 
and  this  not  in  historical  times  only,  but  in  very  recent  cases.  Before 
the  Colonial  Office  surrendered  the  Crown  lands  in  the  Colonies 
to  the  Colonial  governments,  there  was  evidence  of  the  grossest 
jobs  perpetrated  on  behalf  of  the  soundest  patriots  in  the  two 
Houses,  and  indeed  outside  them,  for  persons  in  very  high  places 
were  said  to  have  been  implicated  in  transactions  which  we  should 
call  fraudulent.  The  unearned  increment  may  be  a  reality.  I  am 
disposed  to  think  it  no  better  than  a  hypothesis.  But  be  it  ever 
so  real,  we  may  buy  gold  too  dear,  and  universal  corruption  with 
universal  discontent  is  too  heavy  a  price  for  the  unearned 
increment. 

I  reasoned  in  this  way  twenty  years  ago,  in  opposition  to  my 
friend's  suggestion,  and  longer  experience  has  not  changed  me. 
Of  course  the  scheme  to  which  I  referred,  though  I  beheve  mis- 
taken, was  scrupulously  honest.  There  is  another  scheme  for  the 
nationaUzation  of  land,  on  which  I  hope  to  comment  in  a  future 
lecture.  I  only  say  in  passing  that  this  later  scheme  is  not  inten- 
tionally dishonest.     It  is  exceedingly  startling,  but  it  purports  to 


518  TEE  POLICY  OF  GOVEBNMENT. 

be  the  resumption  of  a  neglected  right,  the  restoration  of  a  system 
of  which  neghgence  and  cupidity  have  permitted  the  violation.  As 
I  have  more  than  once  said,  the  crudest  economical  fallacies  have 
generally  Bome  truth,  always  much  plausibility  in  their  composi- 
tion, and  it  is  not  wise  or  just  to  denounce  those  who  astonish 
us  with  their  theories,  as  being  brigands  and  anarchists.  Long 
experience  and  labour  given  exceptionally  to  the  study  of  economical 
society,  have  convinced  me  that  there  are  reasonable  causes  for  all 
discontents,  however  unreasonable  and  nugatory  are  the  remedies 
which  discontent  avers  to  be  proper,  righteous,  and  necessary. 

It  still  remains  that  I  should  dwell  on  the  other  aspect  of  govern- 
ment propounded  in  this  lecture,  viz.,  government  as  a  producer. 
In  the  cases  which  I  have  already  given  government  is  supposed 
to  be  doing  a  service,  or  is  invited  to  do  a  farther  service,  and  I 
have  by  no  means  criticized  all  the  invitations.  In  what  remains, 
I  shall  consider  government  as  a  producer  only,  that  is,  as  com- 
peting against  ordinary  manufacturers,  for  the  supply  of  govern- 
ment stores,  or  even  of  the  public  wants.  But  I  shall  not  on  this 
occasion  deal  with  what  is  a  favourite  topic  with  some  continental 
socialists,  the  elevation  of  the  government  into  the  function  of  a 
gigantic  and  all-embracing  manufacturer,  who  is  to  appropriate 
all  capital,  or  to  annihilate  its  private  use,  and  distribute  and 
regulate  all  industries  in  the  interests  of  labour.  I  have  to  deal  on 
the  present  occasion  with  a  humbler  function,  one  which  has  been 
in  part  traditional  from  the  earliest  times,  and  is  in  part  a  sub- 
sequent development  for  which  an  economical  justification  is 
alleged.     The  larger  question  I  hope  to  deal  with  hereafter. 

As  soon  as  ever  grants  were  made  in  Parliament  for  the  con- 
struction of  navies,  the  Crown  began  to  establish  navy  docks  and 
works.  These  are  known  to  have  been  in  existence  on  the  Thames 
and  Mersey  for  a  long  time,  but  Henry  VIII.  was  the  real  founder 
or  restorer  of  the  town  and  dock  of  Portsmouth,  which  mdeed 
appears  to  have  been  an  arsenal  and  port  during  the  time  of  the 
Roman  occupation,  and  probably  those  on  the  Thames  and  Medway. 
But  for  a  long  time  the  work  at  these  ports,  Greenwich,  Deptford,  and 
Portsmouth,  was  casual  and  interrupted.  There  was  no  practical 
difference,  except  in  the  artillery,  between  a  private  vessel  and  a 
man-of-war,  and,  in  point  of  fact,  the  strongest  and  most  important 


GOVERNMENT  AS  A  PBODUCEB.  619 

part  of  the  mercantile  marine  were  the  armed  ships  of  the  East 
India  Company.  The  sovereign  could  therefore  constantly  call  on 
the  merchant  shipping  for  vessels  of  war,  and  it  would  seem  that 
the  custom,  only  recently  remitted,  of  pressing  seamen  in  the 
merchant  service  for  the  purpose  of  manning  the  navy,  was  a  relic 
of  that  general  embargo  which  early  tradition  put  on  the  vessels 
and  men  in  the  several  English  ports.  But  as  soon  as  ever  war, 
the  preparations  for  war,  and  the  national  defence  at  sea  became 
an  object  of  public  consideration,  the  various  dockyards  were  kept 
in  a  state  of  constant  activity.  The  jealousy  with  which  for  gene- 
rations pubhc  men  viewed,  or  affected  to  view,  the  army  was  not 
felt  towards  the  navy,  and  Englishmen  began  gradually  to  be 
convinced,  and  with  good  reason,  that  to  a  maritime  power,  the 
best  weapon  of  defence  was  a  well-appointed  marine. 

For  a  long  time  a  royal  dockyard  was  pretty  well  the  only  place 
in  which  a  first-rate  man-of-war  could  be  built  and  equipped.  The 
Dockyard  was  therefore  as  necessary  an  element  in  the  naval 
defences  as  the  Horse  Guards  and  the  depots  were  to  the  army, 
and  there  grew  up  in  these  institutions  a  permanent  staff  of  over- 
seers and  workmen  who  claimed,  with  some  reason  or  analogy,  to 
be  an  abiding  part  of  the  naval  establishment.  In  course  of 
time,  however,  the  shipbuilding  firms  on  the  T}Tie  and  the  Clyde, 
especially  the  latter,  began  to  have  yards  of  a  magnitude  which 
rivalled  in  completeness  and  eflSciency  the  public  works  at  the 
older  docks  already  referred  to,  and  the  newer  establishments  at 
Chatham,  Plymouth,  and  Devonport.  Nor  did  the  development  of 
the  later  system  of  armour-plated  vessels  carrying  a  few  guns  of 
great  power  and  projectile  force  tend  to  confine  the  manufacture  of 
war  vessels  to  government  dockyards.  The  shipbuilders  of  the 
north  took  contracts  with  foreign  governments,  and  constructed  all 
kinds  of  munitions  of  war  for  them.  But  the  government  con- 
tinued to  extend  its  manufacturing  operations,  to  undertake,  as  it 
did  not  at  first,  the  supply  of  small  arms  from  its  own  factories, 
and,  in  brief,  to  take  into  its  own  hands  the  production  of  all  the 
necessaries  for  the  public  defence.  ^ 

This  system,  it  is  said,  was  commenced  after  the  Crimean  "War, 
before  which  time  the  principal  supply  of  munitions  of  war  was 
obtained  from  private  firms,  under  competitive  contracts.     Now  the 


520  THE  POLICY  OF  GOVEBNMENT. 

objections  to  the  change  were,  that  the  cost  of  all  government 
works  was  incomparably  greater  than  the  charges  which  would  he 
incurred  by  dealing  with  private  firms,  as  was  proved  by  the  large 
dealings  of  foreign  states  with  our  manufacturers ;  that  it  loaded 
ihe  manufacture  with  departmental  charges ;  that  the  accounts  of 
expenditure  returned  from  these  factories  were  delusive,  because  they 
set  down  nothing  to  interest  on  buildings  and  plant ;  that  it  quar- 
tered on  the  exchequer  a  whole  heap  of  experimental  inventors,  of 
whose  failures  we  heard  nothing,  though  the  public  had  to  pay 
the  cost ;  that  it  lead  inevitably  to  a  system  of  favouritism,  because, 
it  being  necessary  that  some  practical  man  should  be  put  at  the 
head  of  the  establishment,  the  selection  of  any  one  person  was  the 
exclusion  of  every  one  else ;  that  in  consequence  foreign  govern- 
ments are  likely  to  be  better  supplied  with  naval  and  military  stores 
than  ourselves,  because  they  were  free  to  choose  their  market ;  and 
that  the  system  discouraged  rather  than  stimulated  invention  and 
improvement.  In  short,  it  was  argued  that  we  were  getting  in- 
ferior results  at  extravagant  prices. 

There  has  generally,  too,  been  a  financial  loss  and  a  political 
inconvenience  in  multiplying  dockyards,  and  in  them  workmen 
depending  on  the  naval  department.  Such  localities  were,  it  was 
long  alleged,  seats  at  the  disposal  of  the  government,  at  least  as 
long  as  the  complement  of  men  was  kept  up.  If,  however,  the 
government  showed  any  signs  of  a  rational  economy,  they  im- 
perilled the  allegiance  of  the  constituency  and  lost  support.  It  is 
a  danger,  people  alleged,  to  political  integrity,  to  have  a  large 
number  of  working-men  electors — and  most  of  the  men  even  under 
the  old  franchise  were  electors,  whose  livelihood  and  the  continuity 
of  whose  work  depends  on  the  lavish,  and  it  may  be  unnecessary 
and  unwise,  expenditure  of  public  money.  It  is,  in  short,  politic,  for 
motives  of  public  morality  and  fiscal  economy,  to  confine  govern- 
ment manufactures  within  the  narrowest  limits  possible,  to  confine 
government  to  the  duties  of  government.  If  one  is  to  make  a 
beginning  with  large  and  small  arms,  the  same  reasoning  will  apply 
to  clothing  establishments,  to  boot-and-shoe  making,  and  to  every 
conceivable  kind  of  work,  which  is  better  left  in  private  hands,  and 
selected  by  contract. 

It  was  alleged,  on  the  contrary,  that  government  acts  wisely  in 


THE  DEFENCE  OF  THE  SYSTEM.  621 

producing  and  testing  its  own  stores,  when  such  serious  conse- 
quences depend  on  the  skill  and  integrity  of  an  examiner  of 
contracts,  and  the  goodness  of  the  article  requires  the  highest 
practical  skill  on  the  part  of  the  official  who  passes  it.  There  are 
articles  such  as  those  quoted,  which  can  be  easily  tested  by  a 
moderate  experience.  What  we  manufacture  requires  a  special 
and  highly  educated  experience.  Besides  we  have  this  advantage 
in  producing  arms  and  munitions  ourselves.  They  are  made  on 
such  exact  patterns,  that  a  flaw  which  escapes  careful  scrutiny,  and 
can  only  be  found  out  in  use,  is  easily  replaced  from  the  stores 
where  all  the  parts  are  precisely  alike.  In  matters  of  the  greatest 
importance,  too,  we  cannot  trust  contractors.  We  cannot  always 
escape  heedlessness  ;  we  cannot  always  detect  fraud.  In  that  very 
Crimean  war,  owing  to  a  serious  oversight  in  the  commissariat 
department,  the  army  was  brought  into  the  greatest  peril.  We  can 
exercise  much  more  vigilance  over  processes  which  we  ourselves 
superintend,  than  over  products  which  are  merely  supplied  by  con- 
tractors, and  inspected  by  our  own  experts,  for  a  false  finish,  hiding 
serious  flaws,  may  be  given  to  goods.  To  avoid  loss  on  their  con- 
tracts, private  firms  would  put  upon  us  those  failures  which  our 
more  careful  scrutiny  rejects.  Our  process  may  be  a  little  more  ex- 
pensive, but  it  makes  up  to  the  public  in  safety  what  it  increases 
in  cost. 

It  will  be  seen  that  in  all  this  reasoning  the  question  in 
debate  is  generally  one  of  facts.  It  is  not  disputed,  that  in  the 
supply  of  government  stores,  if  one  can  rely  on  the  integrity, 
the  dispatch,  the  finish,  the  efficiency  of  what  is  supplied  by  public 
competition,  there  are  very  considerable  advantages  in  procuring 
what  a  government  wants  by  the  ordinary  course  of  trade.  It  is 
also  probable  that  by  making  themselves  the  source  of  their  own 
supply,  the  government  cuts  itself  off  from  those  economies  and 
improvements  which  it  is  invariably  the  aim  of  competitive  pro- 
ducers to  accept  and  adopt.  Practically  the  administration  has 
a  bottomless  purse,  or,  at  worst,  in  the  matter  of  the  public 
defences,  an  inexhaustible  store  of  patience  to  appeal  to,  and 
people  on  whom  economy  is  not  enforced,  rarely  seek  out  economi- 
cal processes  for  themselves.  Now,  in  manufactures,  economy  is  all 
but  invariably  coupled  with  improvement.     The  producer  who 


522  THE  POLICY  OF  GOVEBNMENT. 

competes  against  other  producers  is,  by  the  very  law  of  his  being, 
not  content  with  doing  a  thing  cheaper.  That  is  at  best  his  own 
look-out,  and  no  one  has  reason  to  thank  him  for  saving  his  own 
expense.  What  he  has  to  prove  to  his  customers  is  that  he  turns 
out  a  better  article.  So  that,  after  all,  efficiency  is  best  promoted 
by  purchasing  under  competitive  contracts,  and  if  the  public  safety 
is  implied  in  efficiency,  this  competition,  under  proper  restraints 
and  conditions  is,  and  always  will  be,  the  best  guarantee  of  the 
pubHc  safety. 

It  has  always  seemed  to  me  that  that  part  of  the  defence  of 
government  manufactories,  which  insists  on  the  difficulty  of  testing 
work  done,  is  the  weakest  part  of  their  case.  It  implies  corruption 
or  incompetence,  or  both.  I  will  admit  that  it  is  difficult  to  provide 
against  these  risks,  and  I  must  allow  that  our  system  of  giving 
government  officials  of  all  grades  freeholds  in  their  offices  is  a 
practice  of  very  questionable  wisdom.  I  am  certain  that  no  private 
trader  could  afford  the  experiment.  In  the  government  offices, 
forty  or  fifty  years  ago,  there  were  all  the  evils  present  of  a  close 
corporation  of  self-elected  officials.  AVhen  I  was  a  youth  my  father 
asked  a  friend  of  his,  then  naval  lord  in  the  Admiralty  Board,  to  put 
me  in  the  Navy  office.  He  told  my  father  that  he  could  wilHngly 
do  so,  but  that  my  Hfe  would  be  a  burden  to  me  if  he  did,  for  that 
the  Admiralty  clerks  were  a  family  party,  who  would  endure  no 
outsider  among  them,  in  an  estate  which  was  divided  among  a  few 
families.  So  I  never  went,  and  a  member  of  one  of  the  families 
was  put  in.  A  quarter  of  a  century  afterwards,  I  had  tbe 
melancholy  satisfaction  of  getting  my  rival  a  sentence  of  penal 
servitude.  My  friend,  Mr.  Baxter,  then  Secretary  to  the  Navy,  was 
entirely  convinced  that  frauds  were  common  in  the  Navy  contracts. 
He  came  to  Oxford,  and  did  me  the  honour  to  consult  me  as  to 
how  he  might  get  evidence.  I  told  him  that  I  knew  of  a  person 
here  who  was  very  experienced  in  the  leather  trade,  and  that  I 
would  get  his  services.  My  friend  was  so  anxious  about  it  that, 
though  he  was  a  devout  Scotchman,  he  gave,  to  his  own  amazement, 
audience  to  the  leather  expert  on  the  Sabbath.  The  result  was,  he 
discovered  the  fraud,  saved  the  nation  a  quarter  of  a  million,  while 
the  clerk  expiated  his  political  offence  in  a  political  livery. 

I  am  convinced  that  it  is  well  to  circumscribe  the  functions  of 


FBAUDS  AND  PBECAUTI0N8,  C23 

government.  I  am  saying  this  not  as  a  politician,  but  as  -  an . 
economist.  I  believe  that  by  competition  and  scrutiny,  the  former 
as  free  as  possible,  the  latter  as  rigid  as  possible,  the  country  would 
be  better  served,  and  the  necessary  expenses  of  the  state  would  be 
lessened.  The  weakness  of  the  executive  is  so  great,  its  exposure 
to  perfectly  sincere  but  very  dangerous  advisers  is  so  constant,  that 
it  is  best  by  far  to  confine  itself  to  the  function  of  a  choice  between 
rivals.  Of  course,  under  these  circumstances,  the  whole  difficulty 
lies  in  the  inspection  of  contracts.  In  old  times  this  used  to  be 
done  in  all  which  the  government  bought,  by  a  jury  from  those 
city  companies  whose  business  was  in  early  days  associated  with  the 
mystery  of  which  they  are  now  ignorant  members.  In  particular, 
the  Merchant  Taylors  mspected  the  cloth  purchased  by  contract 
for  the  forces.  I  do  not  select  the  Taylors  invidiously,  but  they 
could  hardly  fulfil  the  function  now,  for  I  suspect  that  there  is  not 
a  ready-made  clothier  among  them,  and  this,  I  suppose,  is  what  is 
jneant  by  a  Merchant  Taylor. 

But  I  cannot  doubt  that  it  would  be  possible  to  procure  as  I 
procured,  for  mere  justice  between  contractors  and  the  public,  a 
competent  body  of  persons  who  would  undertake  the  test  of  all  that 
is  bought  for  the  pubHc  service.  Assuredly  such  persons  with  such 
aims  would  not  only  save  the  public  purse,  but  would  give  a  healthy 
stimulus  to  trade.  Experience  teaches  us  that  protected  interests 
have  a  sickly  and  costly  existence.  The  statement  is  true  of  a 
government  producer,  as  well  as  of  a  producer  protected  in  an 
artificial  price  by  government,  for  practically  there  is  no  difference 
between  them.  It  is  not  reasonable  to  expect  faithful  service  from 
an  inspector  of  contracts,  who  is  able  and,  as  I  know  is,  willing  to 
blackmail  the  contractor.  Such  a  practice  is  so  common,  that  it 
forms,  I  am  told  by  many  manufacturers,  who  know  about  govern- 
ment contractors,  a  sensible  element  in  the  contract  price.  It  may 
be  that  the  act  is  a  serious  criminal  offence.  It  is  surely  one  which 
should  be  obviated,  if  it  is  difficult  to  detect  it.  Our  forefathers 
were  not  always  unwise  in  their  processes.  The  government 
established,  and  the  traders  acquiesced  in,  a  jury  of  experts.  They 
did  this,  not  only  for  purchases  made  on  behalf  of  the  Crown,  but 
for  trade  carried  on  in  the  interests  of  the  public.  I  think  we 
might  in  a  modified  form,  revert  to  their  practica     It  is  the  duty 


624  THE  POLICY  OF  GOVEENMENT. 

of  a  government  to  prevent  fraud,  not  only  when  itself  is  the 
victim,  but  when  the  people  whose  affairs  it  administers  are 
defrauded.  The  discovery  of  the  process  of  detection  ought  not  to 
he  difficult.  I  am  convinced  that  its  action  would  not  be  unpopular. 


INDEX. 


Abbots,  their  way  of  living,  65 
Abraham,  call  of,  the  origin  of  modem 

history,  according  to  some,  338 
Accounts,  farming,  &c.,  cause  of  the 

survival  of,  3 ;  not  kept  by  farmers, 

178 
Acquisition,  cost  of,  260 
Acts  of  Parliament,  23  Ed.   III.,  25 

Ed.   III.,  31  Ed.  III.,  34  Ed.  III., 

36  Ed.   III.,   42  Ed.    III.,   26-28; 

1  Eic.  II.,  28;  9  Eic.  II.,  12  Eic. 
II.,  31;  4  Hen.    IV.,  7  Hen.   IV., 

2  Hen.  V.,  4  Hen.  V.,  2  Hen.  VI., 
32;  3  Hen.  VI.,  6  Hen.  VI.,  11 
Hen.  VI.,  15  Hen.  VI.,  18  Hen.  VI., 
23  Hen.  VI.,  33;  11  Hen.  VII.,  7 
Hen.  VIII.,  28  Hen.  VIII.,  34;  5 
Eliz.,  38;  31  Eliz.,  42;  32  Hen. 
VIII.,  103 ;  5  Eliz.,  its  effects,  240; 
collections  of,  241;  9  Geo.  I.,  22 
Geo.  III.,  247;  15  Hen.  IV.,  34 
Ed.  III.,  299  ;  1  Anne,  430;  9  Geo. 
III.,  433;  22  Hen.  VII [.,  485 

Addington,  his  income  tax,  131 
Addison,  on  English  credit,  216 
Adisbam,  rate  of  production  at,  53 
Administrations,  meddlesomeness  and 

conceit  of,  501 
Admiralty  office,  old,  a  narrative  of, 

622 
Adulteration,  why  punishable,  362 
Advertisements,  Elizabeth's,  not  pat 

into  practice,  199 ;  loss  of  incurred, 

to  gain  a  footing,  406 
Ad  valorem  taxes,  their  effect  on  export 

values,  402 
Agio  rapidly  developed  on  Bank  notes, 

210 
Agricultural  Board,  country  reports  of, 

379 


Agricultural  distress,  a  synonym  for 

cheap  food,  377 
Agricultural  gangs,  the  worst  kind  of 

child  labour,  355 
Agricultural  skill,  a  work  of  art,  275 
Agricultural    system,    the    new,    its 

characteristics,     268;    British,    its 

present  decline,  160 
Agriculture,   practical,  in  eighteenth 

century,  176 
Agriculture,  success  of,  its  meaning,  ^ 

46  ;  importance  of,  47  ;  a  universal 

occupation,  143  ;  always  yields  more 

than    the  cultivator's    subsistence, 

165 ;  character  of,  in  early  times, 

170;    progress    of,    in    eighteenth 

century,  177 
Agriculturist,  British,  his  capacity,  48 
Aid  of  1503,  its  distribution,  147 
Aix  la  Chapelle,  peace  of,  467 
Alarmist  calculation,  an,  quoted  by  Mr. 

Giffen,  400 
Alexandria,  a  great  centre  of  banking 

207 
Alien  priories,  suppression  of  the,  418 
Allotments  Act  of  Elizabeth,  42 
Allowance  system,  origin  of,  247 
All  Souls  College,  a  fellow  of,  and  his 

conscience,  192 
Alton,  Hants,  robbers  of,  142 
America,  its  occasional  practices,  224 
American  citizens,  practices  of,  in  visits 

to  England,  368 
American    civil    war,  prolonged    and 

destructive,  293 
American  colonies,  effect  of  the  Seven 

Years'  War  on.  468 
American    plantations,    planters    of, 

their  character,  329  ;  federation  in, 

why  dominant,  481 
American  roads,  origin  of,  490 
Americans,  their  boasted  freedom  and 


626 


INDEX. 


its  reality,  383 ;  travelling  in  Eng- 
land, numbers  of,  and  effect  thereof, 

403 
Amsterdam,   Bank  of,  211 ;   a  centre 

of  trade  once,  401  •,  causes  of  its 

ruin,  109 
Anglican  church,  Selden  on  the,  81 
Anglican    clergy,    representatives    of, 

72 
Antwerp,  negotiation  of  hills  at,  102 
/  Apprenticeship,   limit  put  on    rights 

of,   32 ;  origin  of,  300 ;  well  regu- 
lated, its  value,  362 
Apprenticeships  in  husbandry,  endu- 
rance of,  305 
Arable  rents,  rise  of,  180 
Archdeacons,  antiquity  of,  declared  by 

a  military  Colonial   governor,  338 
Archers'  tax  of  1463,  its  distribution, 

147 
Arches,  brick  in  Henry  VIII.'s  time, 

280 
Architects,  mediasval,  why  unknown, 

20 
Architecture,  masters  of,   in    Middle 

Ages,  304 
Argyll,  Duke  of,   his  illustration  ci 

husbandry,  48;  his  opinion  about  a 

nineteen  years'  lease,  181 
Aristocracy,     English,    pride    of,    in 

eighteenth  century,  176 
Aristotle,    on    crimes    as     contracts, 

343 
Arkwright,  inventions  of,  267 
Army  assessment,  1649,  152 
Army,  English,  its  early  origin,  119 
''    Art,  its  connection  with  utility,  275 
Artificial  rents,  means  of  pcocuring, 

181 
Artizans,    mediaeval,    the    architects, 

20  ;  wages  of,  how  to  be  interpreted, 

303 
Assets    of    Banks,    how   to  be  held, 

219 
Assiento    Treaty,    the,     its    objects, 

320  ;     origin    of    slavery    in    the 

American  colonies,  449 
Audit,  independent,  should  be  exacted 

from  banks,  218 
Avignon,  secession  to,  and  effects  of, 

74 ;  gold  currency  at,  189. 

B. 

Babbage,  Mr.,  on  width  of   market, 

371 
Babylonian  bankers,  practice  of,  206 


Bailee,  government  in  service,  not  a, 
505 

Bailiff's  account,  exactness  of  the, 
54 

Balance  of  bargain,  doctrine  of,  96 

Bank  Act  of  1844,  motives  for,  224 ; 
its  effects,  225 

Bank  of  England,  the,  founded  by 
the  Independents,  86  ;  a  fortunate 
disability  of,  its  relations  to  govern- 
ment, 216 ;  condition  of  on  Dec.  4, 
1696,  220  ;  its  history  for  a  century, 
222 ;  its  services  in  1694-5,  313 

Banker,  name  of,  in  Greek  and  Latin, 
207 

Bankers,  restraint  of,  360 ;  in  House 
of  Commons,  their  action,  507 

Banking,  has  existed  apart  from  coins, 
184 ;  practice  of,  probably  never 
lost,  208  ;  private,  in  England,  212 ; 
in  United  States  based  on  public 
securities,  404 

Bankruptcy  laws,  their  economic 
meaning,  238 

Barley,  imports  of,  to  Netherlands, 
285 

Battle  Abbey,  its  home  farms,  66 

Baxter,  Mr.,  on  the  leather  contracts, 
522 

Bayonets,  flexible,  362 

Beaufort,  Cardinal,  effigy  of,  274 

Becket,  the  reported  inventor  of  scu- 
tage,  119 

Beet-root  sugar,  bounty  paid  pro- 
ducers of,  their  condition,  378 

"  Beggars,  Supplication  of,"  estimates 
alms  to  friars,  242 

Belgian  glass  and  iron,  reputed  im- 
ports of,  409 

Belgians,  their  saving  habits,  438 

Belvoir  estate,  rents  of,  1692,  168 

Benedictine  order,  services  of  the,  71 

Benevolence,  private,  cannot  deal  with 
destitution,  242 

Benevolences,  history  of,  132 

Bentham,  his  service  on  usury  laws, 
237 

Bentinck,  enrichment  of,  unpopular, 
428 

Berkshire,  magistrates  of,  at  end  of 
the  eighteenth  century,  247 

Bessemer,  his  process  for  steel,  233 

Bigod,  Eoger,  his  Irish  estate,  282 

Bimetallism,  some  difficulties  in,  191 

Biscay,  source  of  iron,  276 

Bishops,  murder  of  two  in  1450,  80 ; 
pillaged  by  Elizabeth's  courtiers, 


INDEX, 


627 


180  ;    impoverished   by  Elizabeth, 

421 
Bismarck,  and  his  protectionist  policy, 

357 
Blackburn,    Archbishop,    his    earlier 

career,  108 
Blomfield,  on  village  guilds,  306 
Blue  Posts,  supper  at  the,  425 
Board  of  Trade  returns,  analysis  of,  401 
Bodmin,  generally  the  staple  town  of 

tin,  283 
Bolingbroke  (St.  John),  his  criticism 

of  Harley,  448 
Bonded  warehouses,  effects  of,  405  ; 

Walpole's  scheme  of,  467 
Boots,  French,  made  in  London,  282 
Boots  and  shoes,  made  in  England, 

exported  to  France,  &c.,  410 
Borgia,  Bull  of,  103 
Borgia's  Bulls,  object  of,  and  outcome 

of,  323 
Borrowing,     when     undertaken     by 

government,  393;  from    foreigners, 

how  limited,  438 
Bosworth,  combatants  at,  few,   419 ; 

policy  of  king,  after,  420 
Bounty,  the,  of  1689,  270 ;  its  origin, 

and  the  effects  of,  377 
Brabant,  agriculture  of,  289 
Bradford,  manufacturers  of,  406 
Brakelond,    chronicle    of,    on    Abbot 

Samson  and  Oxford,  298 
Bricks,  art  of  making  lost  in  England, 

279 
Bridges,  repairs  of,  law  of,  486 
Brill,  capture  of,  278 
Bristol,  its  rise,  150 
Bristol  merchants,  expedition  of,  to 

Iceland,  103 
Britain,  Great,  a  centre  of  prices,  390 
British  islands,  temperature  of,  490 
Brougham,  Lord,  his  protest  in  1850, 

126 
Bruges,  mission  of  Wiklif  to,  77 
Buccaneers,  the  English,  398 
Budget,  the  acceptance  or  rejection  of, 

its  effect  on  Parliament,  608 
Bullion  dealer,  trade  of  the,  261 
Bunyan,        sketched     unconsciously 

Henry  VIII.'s  character,  35 
Burcot  pier,    navigation  of    Thames 

from,  279 
Burdens  on  land,  absurdity  of  alled- 

ging,  238 
Burnet,  Bishop,  on  the  English  cli- 
mate, 288 
Bye-industries,  effects  of,  on  rent,  175 


0. 


Cabot,  Sebastian,  his  voyage,  106 

Cadets  of  the  Koyal  house,  their  dis- 
affection, 417 

Caird,  Sir  James,  on  losses  by  eviction, 
173 

Calais,  staple  town  of  wool,  129 

Cambridge,  distinguished  for  its  eels, 
298 

Canada,  proposals  of  a  zoUverein  with 
the  States,  465 

Canadians,  French,  concessions  to, 
333 

Canning,  his  saying  about  the  New 
World,  320 

Canterbury,  St.  Pancras  Church  at, 
279 

Cape  Colony,  acquisition  of,  334 

Cape  trade,  far  less  than  expense  in- 
curred for  it,  335 

Capital,  function  of,  17 ;  aggregation 
of,  praised  in  every  one  but  work- 
men, 311 ;  British,  in  foreign  invest- 
ments, 394 

Capital  and  labour,  endless  warfare  of, 
23  ;  priority  of,  a  barren  question, 
228 

Capitalist  farmers  cannot  be  extem- 
porised by  artificial  prices,  374 

Captains,  first  English,  buccaneers, 
321 

Cardwell,  his  publication  of  Peel's 
writings,  455 

Carlow,  cloth  manufactory  at,  282 

Cash  payments,  suspension  of,  442 

Castlereagh,  Lord,  his  invitation  to 
ParHament,  475 

Cattle,  breeds  of,  61 

Cavaliers,  their  character,  44 

Cecil,  his  "Book  of  Kates,"  421 

Centralization,  motives  for,  480,  sqq. 

Chamberlain,  Mr.,  on  Canadian  finan- 
cial proposals,  465 

Chaplin,  Mr.,  his  remedy  for  English 
agriculture,  382 

Charles  I.,  his  desire  to  debase  the 
currency,  198 ;  his  theory  of  govern- 
ment, 422 

Charles  II.,  his  risks  in  1684,  86;  his 
alienation  of  Crown  estates,  mar- 
riages of  his  illegitimate  sons,  423  ; 
dukes  created  by,  465 

Charles  V,  says  mass  at  a  fishcurer's 
tomb,  278 

Charles  the  Bold,  purposes  of,  482 

Charles  the  Great,  empire  of,  brief,  71 


528 


INDEX. 


Charter,  Great,  its  restraining  clauses, 

120 
Charters  of  City  Companies,  origin  of, 

299 
Chartism,  origin  of,  and  bias  of,  248 
Chatham  (Pitt),  his  belief  in  his  own 

policy,  445 
Cheltenham,  manor    of,  in  fifteenth 

century,  264 
Chevallier,  Mr.,  on  ratios  of  gold  and 

silver,  189 
Chichele,  his  purchase  of  the  alien 

priories,  418 
Childers,  Mr.,  his  budget  in  1885,  478 
Children's  labour,  restraints  on,  354 
China,  currency  in,   185 ;    effects  of 

adopting  a  silver  currency  by,  190 
Chivalry,  a  pretentious  sham,  351 
Christianity,  appeals    to,  by  traders, 

suspicious,  329 
Christie,  Mr.,  on  Shaftesbury,  6 
Church,  changes  in  the,  458 
Church,  Canadian,  its  powers,  334 
Church,  English  parties  in  the,  72 
Churches,  use  of,  in  Middle  Ages,  144 
Cicero,  his  oration  for   Flaccus,  ito 

interest,  207 
Cinque  Ports,  privileges  of,  136 
Cities  and  towns,  English,  population 

of,  in  1377,  283 
City  Companies,  possible  utilization 

of,  523 ;  London,  duties  of,  299 
City  (London),  estate  in  the  west,  its 

origin,  148 
Civil  war,  American,  result  of  Assiento 

Treaty,  450 
Clarendon,  on  condition  of  England, 

139 
Class  privileges,  danger  of,  352 
Clergy,  poverty  of  in  the  seventeenth 

and  eighteenth  centuries,  87 
Clergy,  English,  victory  of  Edward  I. 

over  the,  122 
Clergy,  regular,  the  services  of  the,  62 
Clipped  money,  difficulty  of  the,  and 

explanations  given  of,  200 
Cloth,  Early  English,  coarseness  of, 286 
Cloth  manufacture,  migrations  of,  286 
Cloves,  bloodshed  for  possession  of,  109 
Coach,  stage,  story  of  submersion  of 

one,  490 
Coal,  demand  for   after   the  Franco- 
German  war,  230 
Colleges,  estates  of,  180 ;  meagre  life  of 

in  Elizabeth's  reign,  199 
Colonial  Office,  government  of  colonies 

by,  336 ;  jobs  in,  517 


Colonial  protection,  put  out  of  the 
retaliatory  theory,  380 ;  defence  of, 
385 

Cobden,  Mr.,  his  commercial  treaty 
■with  France,  and  his  motives,  113  ; 
his  translation  of  Chevallier,  189 

Cochrane,  Lord,  story  of,  201 

Coinage,  invention  of  place  of  not 
known,  184 

Coins,  all  sorts  of,  in  Venetian 
treasury,  209 

Coke,  family  of,  their  public  services, 
268 

Colbert,  policy  of,  effects  of,  460 

Colonial  system,  the,  described  and 
criticized,  325 

Colonial  trade,  growth  of  in  the  seven- 
teenth century,  288;  effects  of  on 
trade  values,  328 

Colonies,  of  conquest,  their  cost,  and 
their  practices,  324;  British,  after 
war  of  American  independence,  332 ; 
of  conquest,  and  of  settlement,  diffe- 
rent character  of,  333  ;  present  rela- 
tions of,  339 

Colonies,  British,  loans  in,  440 ;  diffi- 
culties of,  441 

Colonists,  American,  mainly  agricul- 
turists at  the  outbreak  of  the  War 
of  Independence,  331 

Columbus,  his  voyage,  106 

Combinations  of  workmen,  condemned 
by  the  wage-fund  theory,  309 

Commercial  disadvantage,  inevitable 
under  Protection,  and  why,  381 

Commercial  law,  relics  of  from  an 
early  age,  208 

Committees,  Special,  of  House  of 
Commons,  their  constitution,  and 
futility  of,  492 

Common  employment,  an  abominable 
doctrine,  352 

Commonwealth,  more  generous  to 
labour  than  monarchy,  44  ;  growth 
of  England  under  and  after  the, 
287  ;  wages  in  time  of,  372 

Common,  rights  of,  their  value,  42 

Company,  feelings  of  trader  towards 
his,  302  C^ 

Competition,  effect  of  on  prices  and    *^ 
profits,  232    4-  ^ 

Competition  rents,  long  unknown,  171 

Competitive  and  famine  rents,  no  dis- 
tinotion  between,  173 

Compromises,  necessity  of,  113 ; 
blamed,  but  inevitable,  356 

Canons  of  taxation,  Smith's  four,  116 


INDEX. 


629 


Concerted  action,  more  remedial  than 
legislative  restitution,  353 

Congleton,  Lord,  his  proposals,  474 

Conqueror,  people  who  say  their 
families  came  over  with  the,  413 

Conquest,  baroas  of,  some  extirpated, 
272 ;  nobles  of  the,  some  extir- 
pated, 413 

Conservative,  Peel  was,  but  a  dangerous 
ally,  455 

Conspiracy,  constructive,  an  engine  of 
tyranny,  45 

Constituencies,  in  dockyards,  tenden- 
cies of,  520 

Constitution,  unfair  use  of  the,  165 

Constitution,  American,  powers  of 
Supreme  Court  in,  344 

Consumption,  taxes  on,  383 

Continental  we.r,  effects  of,  292 

Contraband  trade,  the,  in  Hampshire, 
123 

Contracts,  enforcement  of,  why  neces- 
sary, 342 ;  risks  of,  523 

Contracts  for  use  of  land,  must  be 
regulated  by  law,  and  why,  359 

Controversy,  a  practical  rule  in,  158 

Convocation,  grants  of,  confirmation 
of,  134 

Copvholds,  purchases  of  by  gentlemen, 
264, 

Cook,  Captain,  his  discoveries  and 
annexations,  291 

Co-operative  stores,  a  complaint 
against,  477 

Corn  Law,  first  real,  that  of  the  Pen- 
sionary Parliament,  377 

Corn  rents,  Act  of,  in  1576,  199 

Cornwall,  Earldom  of,  416 

Corporations  not  safe  bankers  under  de- 
spotisras,212 ;  their  undertakings,  507 

Corruption,  in  the  United  States,  385 

Cost,  saving  of,  effects  of,  233 

Cotiller,  Sir  Kalph,  and  abbess  of 
Sion,  264 

Cotton,  use  of,  origin  of,  327 

Counties,  English,  wealth  or  poverty 
of,  145 

Counties  of  towns,  creation  of,  415 

Country  banks,  treatment  of  by  Peel, 
and  reasons  for,  225 

Court  favourites,  dislike  to,  in  England 
through  its  history,  125 

Court  Eolls,  importance  of,  3 

Coventry  Parliament,  1459,  its  action, 
420 

Ooxe,  Archdeacon,  his  life  of  Walpole, 
465 


Credit,  power  of  Banks  over,  219 

Crimean  war,  indirect  effects  of,  293  ; 
dangers  in,  origin  of,  521 

Criminal  investigation,  a  director  of, 
his  function,  370  « 

Criminal  Law  Amendment  Act,  clause 
in,  361 

Criticism,  social,  in  the  last  quarter 
of  the  fourteenth  century,  22  ;  par- 
liamentary, its  effect,  451 

Crompton,  invention  of,  267 

Cromwell,  Lord,  in  the  fifteenth  cen- 
tury, his  rise,  64 ;  his  statement  in 
1438, 419 

Cromwell,  hisNewModel,119 ;  national 
bank,  suggested  in  time  of,  212  ;  his 
exaltation  of  England,  287;  his 
establishment,  422;  his  imitation 
'  of  Dutch  finance,  436 ;  finance  of, 
457 

Crown,  estate  of,  its  original  mag- 
nitude, 412;  in  1703,  430;  its 
present  position,  431 

Crown  lands,  rents  of,  516 

Croydon,  sewage  farm  at,  231 

Cultivation,  system  of,  in  open  fields, 
60 

Cumberland,  permanently  the  poorest 
English  county,  149 

Currencies,  continental,  accounts  of  ,203 

Currency,  debasement  of,  by  Henry  and 
his  son's  guardians,  36  ;  importance 
of  true  understanding  of,  183  ;  de- 
basement of,  history  of,  197 ;  two 
kinds  of,  efficiency  of,  203 ;  regula- 
tion of  forms  of,  by  the  State,  205  ; 
gold  and  silver,  relations  of,  254 ; 
restoration  of,  reasonings  at  time 
of,  454 

Customs,  difficulty  of  collecting,  123 

Customs  duties,  grant  for  its  purpose, 
398 


Danske  trade,  extent  of,  101 
Dartford,  paper  made  at,  280 
Davenant,  on  Resumptions,  118;  his 
return   of  the  poor  rate,  245;  his 
narrative  of  Burnet's  conversation, 
288  ;  his  pamphlet  on  Resumptions, 
his  literary  abilities,  424 
Debt,  liquidation  of,  present,  455 
Debt,  floating,  not  funded  after  Peace 

of  Ryswick,  429 
Debt,  permanent,  oldest  part  of  the, 
449 


86 


580 


INDEX. 


Debts,  colonial,  effects  of,  339 ;  early, 
their  character,  450 

Pecentralization,  motives  for,  480,  sqq. 

Deer  forest,  rent  of,  a  poor  defence,  233 

Delusions,  popular,  cheap  investments 
in,  339 

Demagogues,  frequent  tendencies  of, 
458 

Demetrius  of  Ephesus,  his  advocacy 
of  vested  interests,  345 

Departments,  spending,  claims  of,  451 

Derbyshire,  production  of  lead  in,  283 

Derry,  county,  estates  of  Companies 
in,  448 

Despotic  government,  loans  to,  pre- 
carious, 448 

Destitution,  economical  defence  of, 
relief  of,  244 

De  Witts,  murder  of  the,  212  ;  their 
position  in  Holland,  427 

Differential  duties,  effects  of,  329 

Di  Gama,  Vasco  doubles  the  Cape,  106 

Diminishing  cost,  effect  of,  on  prices, 
255 

Diplomatic  instruments,  wealth  of  in 
England,  4 

Direct  taxation,  its  unfairness  inevit- 
able, 124 ;  its  effect  on  the  nation, 
297 

Discount,  rate  of,  and  interest,  451 

Dissenters  founded  Bank  of  England, 
214 

Dissolution  of  monasteries,  connected 
by  some  with  pauperism,  243 

Distress,  law  of,  172 
"^  Distribution,  laws  of,  human,  234 

Distribution  of  products,  order  of,  163 

Distribution  of  wealth,  laws  of,  50  ; 
difficult  to  interpret  at  present,  141 

Docks,  origin  of  English,  518 

Dockyards,  development  of,  519 

Domesday,    its    importance,     3 ;    its 
evidence  as  to  the  distribution   of 
/      wealth,  141 

Domestic  servants,  wages  of,  488 

Dominion,  civil,  Wiklif's  treatise,  criti- 
cism of,  75 

Dominion  of  Canada,  fiscal  policy  of, 
334 

Donationes  inter  vivos,  constantly  prac- 
tised by  rich  people,  473 

Downs,  cultivation  of,  in  Hampshire, 
179 

Doyle,  Mr.,  on  early  history  of  the 
American  plantations,  322 

Draka  the  character  of  his  expeditions, 
10 


Dryden,  like  Caliban  in  the  re-modelled 

"Tempest,"  266  • 
Dublin,  valuation  of,  in  1657,  153 
Duchies,  the,  of  Lancaster  and  Corn- 
wall, 432 
Dudley,  Dud,  his  invention  or  improve- 
ment, 287 
Dutch,  the,  their  objects  in  trade,  109 ; 
origin  of  their  resources,  260;  and 
the   family  of   Orange,  334;    their 
services  to  civilization,  435 ;    their 
sympathy  with    the    Stuarts,    and 
their  reward,  459 
Dutch  trade,  character  of,  327 
Dutch  war,  assessment  for  1672,  154 
Dumont,  his  collection  of  treaties,  92 

E 

East  Anglia  does  not  love  the  clergy, 
80 

East  Coast,  Navigation  of  the,  282 

East  India  Company,  remodelling  of, 
by  Parliament,  86 ;  before  Mr.  Mill's 
mind  when  he  advocated  a  temporary 
protection,  387 

East  India  Company,  Dutch,  its  origin, 
108 

East  India  Company,  New,  origin  of, 
462 

East,  trade  with,  first  impugned  the 
balance  of  cash  doctrine,  391 

Eastern  produce,  early  routes  of,  10 

Eastern  trade,  routes  of,  in  fourteenth 
century,  104 

Ecclesiastical  history,  a  limited  teach- 
ing of,  in  Oxford,  70 

Economical  facts,  neglect  of,  its  effects, 
1 

Economists,  rashly  predict  impossi- 
bilities, 50 ;  French,  rise  of,  347 ; 
politicians,  their  relations,  503 

Eden,  Mr.,  his  treaty  of  1786,  112 

Eden,  Sir  Frederic,  his  work,  and  its 
value,  247 ;  on  the  wages  of  the 
poor,  and  the  discontent  of  the 
farmers  thereat,  375 

Edinburgh,  assessment  of,  in  1657, 
153 

Education  develops  hereditary  powers, 
290;  elementary,  cost  of,  put  on 
parents,  356  ;  and  wages,  357  ; 
taxes,  (fee,  who  should  pay,  495 

Edward  I.,  projects  and  policy  of,  122; 
his  theory  of  representation  and  tax- 
ation, 126 

Edward  II. ,  causes  of  his  deposition,  417 


INDEX. 


631 


Edward  III.,  his  claim  to  French 
throne,  74 ;  marriages  of  his  sons, 
417 ;  borrowed  of  Florentine  bankers 
and  repudiated,  434 

Edward  IV.,  his  character  misrepre- 
sented, 132 ;  his  project  of  invading 
France  in  1472,  135 

Edward  VI.,  his  guardians,  and  their 
baseness,  36  ;  reign  of,  waste  of,  by 
his  guardians,  421 

Effects  endure  after  causes,  62 ;  do 
not  cease  with  causes,  350 

Egypt,  decline  of,  after  the  conquest 
of  Selim,  11 

Eighteenth  century,  progress  in  the, 
289 ;  temper  of,  illustrated  in,  347 

Eight  hours'  day,  rule  of,  in  England, 
303 

Elizabeth,  poverty  of,  and  reforms  of, 
37 ;  re-coinage  by,  facts  of,  195 ; 
proclamation  of,  196 ;  her  restorar 
tion  of  the  currency,  416 

EUesmere,  Lord  (James  I.),  on  mort- 
gages, 343 

Employers,  paid  higher  wages  than 
magistrates'  assessments  allowed, 
241 ;  benefit  by  a  Poor  Law,  245  ; 
some  begin  to  see  that  Trade  Unions 
are  useful,  315 

Employment,  provision  of,  by  the 
state,  313  ;  stint  of,  effect  of,  373 

Enumerated  and  non  -  enumerated 
goods,  meaning  of,  331 

Enclosure  Acts,  compensation  for,  487 

Enclosures,  effects  of,  on  the  poor, 
246 

England,  distribution  of  wealth  in, 
138,  sqq. ;  influx  of  silver  into,  196  ; 
its  wrongdoings  with  Holland,  211 ; 
Bank  of,  origin  of,  213 ;  population 
of,  in  North  and  South,  246  ;  down- 
fall of,  under  Henry  VIII.,  265; 
development  of,  difficult,  296 ;  has 
often  lost  what  it  gained,  319 ;  cannot 
produce  everything,  409 ;  local  in- 
stitutions in,  482 

England,  Northern,  its  poverty,  145 

English  people,  by  no  means  patient, 
193  ;  confuses  names  with  things,  449 

English  roads,  origin  of,  490 

English,  their  hindrances  to  inter- 
national comity,  94  ;  relations  of,  to 
Flemings,  101 ;  naturally  not  an  in- 
ventive people,  272 

English  trade,  early  character  of,  100 

Enjoyment,  possibility  of,  fundamen- 
tal, in  taxation,  117 


Enterprise,    individual,    partnership,  ^ 
Joint  Stock,  208 

Equation,  always  effected  by  trade,  but 
in  different  ways,  395 

Equity,  rules  of,  in  enforcing  contracts, 
344  *^ 

Ernest  of  Saxe-Coburg,  debasement  of 
currency  by,  197 

Europe,  at  once  protectionist  and  mili- 
tary, 382 ;  wars  in,  from  1714  to  1793, 
110 

European  history,  Dutch  war  the  most 
striking  fact  in,  435 

Errors  and  injuries  of  Government, 
how  far  to  be  incurred,  346 

Evans,  Mr. ,  on  the  early  British  cur- 
rency, 185 

Examinations,  absurdity  of,  290 ;  pre- 
sent system  of,  its  absurdity  in  pri- 
mary schools,  358 

Exchange,  free,  its  benefits,  93 

Exchanger,  King's,  his  function,  96  ; 
origin  and  history  of  the  office,  187 

Exchanges,  early  process  of,  206 ;  fluc- 
'.tuations    of     the,     213 ;     foreign, 
process  of,  198 

Exchequer  Bills,  origin  of,  222 

Exchequer,  dialogue  on  the,  412 

Excise,  first  imposition  of,  137 ;  the 
Dutch,  its  universality,  436 

Exhaustion,  political,  signs  of,  439 

Export  d«ty,  conditions  of  an,  10 

Exports  and  imports,  general  theory 
of,  96,  sqq. ;  study  of,  a  puzzle,  390 

ExportSjCustoms  on,  rarely  possible,398 


Factory  Acts,  arguments  for,  355 
Fair  trader,  his  case,  371 
Fair  traders,  sophistries  of,  240 
Famine  of  1438,  petition  during,  55 
Famines,   occasions  of,  in  England, 
16  ;  the  great,  of  the  fourteenth  cen- 
tury, and  those  of  the  sixteenth,  56; 
dates  of,  262 ;  in  the  seventeenth 
century,  266 
Far  West,  stories  about,  106 
Farmer,  unjust  to  put  a  police  rate  on 

holding  of,  493 
Farmers,  bilingual,  54;    imitate    the 

new  system,  177 
Farmers'  rents,  income  tax  from,  476 
Farm  hand,  accomplishments  of  the, 

20 
Fastolf  e,  his  trade,  66 ;  his  purchases, 
115 


582 


INDEX. 


Fawcett,  Mr.,  on  Trade  Unions  or 
labour  partnerships,  307 

Federation,  varied  fortunes  of,  as  a 
principle,  480 

Fertility,  economic  senses  of,  166 ; 
meaning  of,  with  economists,  498 

Feudal  liabilities,  assessment  for  1660, 
154 

Fictions,  occasiot.ally  instructive,  370; 
pressed  into  arguments,  409 

Field,  Mr.  Cyrus,  the  author's  predic- 
tion to,  385 

Fifteenth  century,  characteristics  of, 
264  ;  English  mercantile  marine  in, 
319 

Financial  motives,  have  often  caused 
revolts,  194 

Fiscal  system,  effect  of  a  bad,  in 
British  industry,  372 

Fish,  diet  on,  in  Middle  Ages,  277 

Fitzherbert,  on  the  extortion  of  land- 
lords, 67  ;  on  landlords,  171 

Fitzherbert  (Long-beard),  his  insurrec- 
tion, 129 

Fitz James,  his  purchases,  151 

Flaccus,  his  conduct,  207 

Flanders,  political  relations  of,  to  Eng- 
land, cause  of,  8  ;  early  irhmigrants 
from,  to  Norfolk,  90 ;  trade  of,  102  ; 
influence  of,  on  Norfolk,  144;  de- 
scription of,  1467-77,  285 ;  ruin  of, 
and  causes  of,  286 

FJax,  compulsory  cultivation  of,  144 

Fleetwood,  Bp.,  his  "  Chronicon  Pre- 
ciosum,"  192 

Flemings,  trade  of  the,  101;  the 
weavers  of  Europe,  273 

Florentine  bankers,  loans  of,  to  Ed- 
ward III.,  434 
V  Food,  interpretation  of  wages  in,  43 ; 
policy    of    government    about,    in 
early  English  times,  377 
V     Forces,  two,  in  government,  479 

Foreign  debt,  effects  of,  260 

Forestalling  and  regrating,  offence  of, 
why  created,  377 

Forest  laws,  motives  for,  483 

Forms,  antiquity  of,  suggestive,  296 

Forster,  W.  E.,  and  early  English 
cloth,  285 

Fox,  Henry,  his  wish  to  make  Eng- 
land a  free  port,  468 

France,  position  of,  in  1763,  110 ;  war 
with,  and  grants  during,  127 ;  the 
degradation  of,  197;  attempts  to 
conquer,  273  ;  has  coveted  the 
Ehine,   287;   its  modern   colonies, 


290  ;  exports  and  impoi  ts  of,  404 ; 
king  of,  in  1640  and  1688,  458; 
federalism,  why  unpopular  in,  489 

Franklin,  his  retort  to  Gibbon,  331 

Franks,  his  gift  to  Oriel  College,  67 

Freeman,  Profesbor,  his  "  Norman 
Conquest,"  3 

Free  port,  the  United  Kingdom,  virtu- 
ally a,  398 

Free  Trade  can  be  less  easily  aban- 
doned  than  Protection,  47 ;  growth 
of  principle  of,  349 ;  a  question 
before  the  American  P»,epublic,  385 

Free  trader,  risks  of,  in  the  United 
States,  366 

Freight,  cbarges  of,  reduction  of,  230; 
diminished  cost  of,  256 ;  cost  of, 
fri^m  America,  271 ;  effects  of  regu- 
lating by  law,  327 ;  cost  of,  a 
natural  protection,  369 ;  invisible 
export  and  import,  397 ;  not  taxed 
by  United  States,  403 

Fremantle,  Mr. ,  on  the  risks  of  private 
coining,  190 

French,  modern  colonies  of,  323 

Friar  Bacon  and  Friar  Bungay,  play 
of,  62 

Front  benches,  the  two,  their  ideal 
debates,  351 

Froude,  Mr.,  thinks  Henry  a  patriot 
king,  36 ;  on  the  patriot  king's 
offences,  197 

Funding  system,  process  of,  and 
criticism  of,  452 

G. 

Galton,  Captain,  on  heredity  of  genius, 

289  ;  on  hereditary  genius,  356 
Game,  capture  of,  by  labourers,  42 
Gamlingay,  survey  of,  in   1603,  59  ;. 

small  parcels  of  land  in,  172 
Gardiner,   Mr.,    on    Wentworth    and 

Laud,  6 
Gascoigne,    his    opinion    about    the 

monks,  73 ;  on  the  Papal  court,  the 

bishops  and  monasteries,  263 
Gascony,  conquest  and  revolt  of,  102 
Genoa,   Bank    of,    its    history,   210 ; 

loans  of,  repudiated  by  Philhp  HI., 

434 
George,  Mr.,  the  origin  of  his  theory 

in  Malthus    and    Eicardo,    7;    on 

Kicardo's  theory,  162 
German  scholars  do  not  seem  to  have 

studied  early  economical  history  of 

Germany,  286 


INDEX, 


533 


Germany,  troubles  of,  at  the  beginning 
of  seventeenth  century,  causes  of, 
12 ;  her  gold  currency,  189 ;  her 
modern  colonies,  290 ;  wars  in, 
since  1860,  294 ;  its  modern  attempt 
at  colonization,  323 

Gibbon,  his  message  to  Franklin,  331 

Giffen,  Mr.,  value  of  his  essays,  8 ; 
his  phrase  about  freights,  397 ;  his 
essays  on  finance,  400 ;  on  the 
earnings  of  freight,  401 

Gilbert's  Act,  purpose  of,  245 

Gladstone,  Mr.,  on  the  picture  of  the 
English  clergy,  drawn  by  Macaulay, 
87 ;  his  defence  of  the  income  tax, 
131 ;  on  currency  and  love,  202 

Glass,  imports  of,  defence  of,  409 

Glass-making,  improvements  in,  274 

Gloucestershire,  cultivation  of  tobacco 
in, 322 

Gold,  price  of  and  coinage  of,  188 ; 
price  of,  in  1462,  195 ;  production 
of,  in  Ireland,  258 

Golden  bough,  the  discovery  of  the, 
351 

Goldsmiths,  the,  original  English 
bankers,  212 

Government,  English,  never  colonized, 
but  with  convicts,  321 

Government,  necessary  development 
of  a  central,  164 ;  theory  and  prac- 
tice of,  345  ;  favours  of,  378 ;  its 
powers  of  borrowing,  437;  borrow- 
ing, its  conditions  in  loans,  451 

Government  paper,  issue  of,  effects  of, 
441 

Governments,  desire  of,  for  money, 
95  ;  often  in  the  wrong,  and  always 
impatient,  323  ;  the  principal  agents 
in  ruining  nations,  393;  always 
weak,  and  liable  to  influences,  517 

Goschen,  Mr.,  on  income  tax  returns, 
370 ;  his  committee  on  local  taxa- 
tion,  492  ;  effect  of  his  publication 
on  local  taxation,  498 

Governor,  Colonial,  story  of,  when 
made  a  judge  in  equity,  502 

Grant,  special,  of  1375,  its  distribution, 
147 

Grants,  extraordinary  distrust  at,  125 ; 
to  Crown,  origin  of,  118 ;  from 
Crown,  duration  of,  423 

Greenbacks,  circulation  in  America, 
442 

Greenways  Bank,  failure  of,  218 

Greenways,  Messrs.,  bank  of,  361 

Gresham,  Sir  Thomas,  his  formula, 


37;  the  king's  Antwerp  agent, 
198 

Grimston,  Sir  Harbottln,  his  signature 
to  the  book  of  custonjs,  323 

Grocer,  business  of  a,  illustrates  ex- 
ports and  imports,  407 

Grocers'  Company,  tines  inflicted  by, 
299 

Grotius,  his  dispute  with  Selden,  278 

Ground  rents,  taxation  of,  497 

Guienne,  revolt  of,  and  financial 
measures  on,  134 

Guilds,  rural,  spoliation  of,  15  ;  town 
and  country,  traits  of,  305  ;  endow- 
ments of,  306 


Half   truths,  danger  of,   illustrated, 

346 
Hallam,  Mr.,  on  mediasval  villages,  4  ; 

his  authorities,  13 
Hamburgh,  imports  of  "  sherry"  from, 

401 
Hammond,  Mr.,  M.P.  for  Huntingdon, 

his  papers,  temp.  Anne  and  George 

L,  330 
Hanover,  house  of,  stability  of,  432 
Hanseatie  League,   origin,  purposes, 

and  fortunes  of,  100 
Harcourt,     Sir    W.,    on    a    female 

domestic  at  the  Treasury,  290 
Harley,  his  indecision  in  Anne's  reign, 

448 
Hartlib,  on  production  in  England, 

53 
Hearth  tax,  inferences  from,  158 
Heaven-born  minister,  an  inaccurate 

name  for  Pitt,  223 
Heiresses,    weddings  of    king's   sons 

with,  414 
Hemp,  compulsory  cultivation  of,  144 
Henley,  Walter  de,  on  agricultural  pro- 
duce, 53 
Henry  II.,  church  parties  in  the  time 

of,  72 ;  his  provision  for  his  sons, 

413 ;  dominions  of,  482 
Henry  HI.,  his  difficulties  with  the 

Alton  robbers,  142 ;  nearly  deposed, 

and  why,  416 
Henry  IV.,   breaks  his    own  law  at 

Windsor,  32 ;  his  marriage  and  his 

poverty,  418 
Henry  VI.,  his  character,  83 ;  marriage 

of,     its    unpopularity,    417 ;    im- 
poverishment of  Crown  in  reign  of, 

418 


584 


INDEX. 


Henry  VII.,  his  claim  of  aids,  135 

Henry  VIH.,  his  character  and  actions, 

35 ;    debasement    of    currency    by, 

197  ;  his  mania  for  brick  buildings, 

279 ;     his     acquisitions     and    his 

extravagance,  420 

Henry  of  Portugal,  his  discoveries,  106 

"Heralds  at  arms,"  "Debate  of,"  103 

High  and  low  prices,  causes  of,  often 

intricate,  261 
Higher  or  technical  education  at  the 

expense  of  the  state,  362 
Highways,  condition  of,  62 
'^  History,  neglect  of  economical  facts 
in,  2 ;  its  progress  and  shortcomings, 
4 ;  constitutional  and  political,  183  ; 
philosophy  of,  hollow  and  weari- 
some,   272 ;    secret    materials    of, 
concealed  and  discreditable,  470 
History,  philosopher  of,  his  chaotic 

talk,  450 
Hoarding,  how  passion  for  arises,  235 
Holdings,  small  at  Tandridge,  239 
Holkham  estate,  rents  of,  1629-1706, 

168 
Holland,   struggle   of,   after  indepen- 
dence, its  importance,  211 ;  its  ser- 
vices and  its  enemies,  400 ;  a  Free 
Trade  country,  436 
Holywell,  Oxford,  jurisdiction  in  manor 

of,  143 
Honour,  codes  of,  in  callings,  314 
Hope,  Mr.,  on  the  Bank  of  Amster- 
dam, 212 
Hops,  a  peculiarly  risky  crop,  180 
Houblon,  Sir  John,  first  governor  of 

Bank  of  England,  his  origin,  215 
Houghton,  his  collections  and  prices 

of  Bank  stock,  214 
House  of  Commons,  growth  of  power 
of,  early,  122  ;  taxes  originate  in, 
origin  of  the  custom,  132 ;  its  reflec- 
tion on  William  in  Anne's  reign, 
430 ;  British,  its  present  freedom 
from  corruption,  433 
House  of  Lords,  its  original  character, 

133 
Houses,  acreage  to,  in  1690,  158 
Houses  of  Parliament,  history  of,  in 

seventeenth  century,  87 
House  taxes,  grossly  unequal,  494 
Huguenots,  the,  immigration  of,  into 
England,  288 
.    Human  institution,  laws  of,  in  what 
^         sense  used,  234 

Humanity,  claims  of,  the  true  defence 
of  a  poor  rate,  489 


Hume,  Joseph,  procured  the  repeal  of 

the  labour  statutes,  45 
"  Humphrey  Clinker,"  its  evidence  as 

to  English  roads,  484 

I. 

Idola  specus,  illustrations  of,  351  "^ 

Imperialists,  British,  calumnies  of,  386 
Imperial  Institute,  its  peril,  380 
Importers,     value     of      imports     on 

authority  of,  401 
Import  values,  exaggeration  of,  402 
Impossibilities,  present  and  manifest, 

229 
Improvements,  some  do  not  increase 

rent,  179 
Income  Tax,  the,  unfair,  118 ;  Pitt's, 

474;    Peel's,    475;    unfairness    of, 

and  incidence  of,  476 ;   payers  of, 

pay  what    should  be    local  taxes, 

499 
Income  Tax  returns,  not  conclusive  as 

to  the  distribution  of  wealth,  140 
Indebtedness  of   foreign  countries  to 

the  United  Kingdom,  effects  of,  98; 

foreign  to  England,  effects  of,  204 
Independence,  War  of,   its  effects  on 

the  Colonial  system,  469 
Independency,  chief  home  in  London, 

85 
Independents,  the  founders    of    the 

Bank  of  England,  86 
"Indestructible    powers,"  an  absurd      / 

phrase,  161 
India  Bill,  Fox  and  Pitt  on  a,  349 
India,  British,  loans  for,  440 
India,  struggle  in,  between  France  and 

England,  110 ;   value  of  rupee  in, 

190 
Inductions,    negative,    generally    the 

work  of  economists,  503 
Industries,  early  English  character  of, 

321 
Industry,  real,  what  Protection  does 

to,  367 
Industry,   English,   in  Middle    Ages, 

chiefly      agricultural,      21 ;      early 

attempt  to  stimulate,  376 
Inheritance,    national,   succession  to, 

445  ;  taxes  on,  defence  of,  examined, 

471,  sqq. 
Institutions,  human,    never    entirely    v 

just,  344 
Insurrection,  the,  of  1381,  22 
Intelligence,  human,  progressive,  but    ^ 

its  limits  unknown,  49 


INDEX. 


535 


Intercnrsns  Magnns,  policy  of,  111 

interest,  its  relation  to  profits,  19; 
natural  diminution  of,  237;  dan- 
gerous to  meddle  with,  238 ;  amount 
payable  on  loans,  395 

International  currency,  amount  of,  in 
England,  203 

International,  the  kinds  of,  502 

Invention,  motives  of,  284 

Inventions  of  nineteenth  century, 
generally  English,  292 

"  Invisible  export  and  import,"  a 
phrase  of  Mr.  Giffen,  397 

Ireland,  assessment  of,  in  1657,  153 ; 
landlord  and  tenant  in,  163;  pro- 
duction of  gold  in,  258;  manufac- 
tures of  proscribed,  325 ;  manufac- 
tures of  destroyed,  378 ;  exemption 
of,  from  Act  of  1  Anne  cap.  6,  431 

Irish  Academy,  treasures  of  the,  258 

Irish  Americans,  export  of  money  to 
Ireland  by,  403 

Irish  estates  of  London  Companies, 
their  origin,  421 

Irish  Land  Acts,  the  various,  514 

Irish  landowners,  Arthur  Young  on, 
376 

Irish,  opinion  of,  on  Cromwell  and 
James  II.,  460 

Irish  pension  list,  scandalous  character 
of  the,  431 

Irish  priest,  the,  his  influence,  81 

Irish  rebellion,  assessment  for,  152 

Irish  tenant,  interest  of,  made  pre- 
carious, 343 

Irish  union,  the  first  Sir  Eobert  Peel 
on  the,  327 

Irish  woollens,  suppression  of,  advised 
by  Davenant,  and  why,  288 

Iron,  high  price  of,  effects  of,  61 ;  want 
of,  and  dearness  of  in  early  agri- 
culture, 276 

Italy  did  not  quarrel  with  the  Papacy, 
and  why,  79  ;  revival  of  banking  in, 
207 ;  its  taxes  on  public  dividends, 
443 

Ivan  the  Terrible,  reign  of,  and  rela- 
tions of,  with  England,  104 


Jacob,  example  of,  perhaps  suggested 
seven  years'  apprenticeship,  301 

James  I. ,  no  one  in  the  right,  who  was 
on  good  terms  with,  278  ;  his  wrath 
at  tobacco  smoking,  322  ;  his  absur- 
dities, his  expedients  for  money,  421 


Jenkins'  ears,  story  of,  467 

Jevons,  Mr.,  on  coal  measures,  229 

Jews,  the,  interfered  with  by  Flaccus, 
207  ;  pedigrees  of,  in  the  days  of 
Nehemiah,  413  ;  thrift  of  the,  438 

John  the  Good,  of  France,  his  acts, 
197 

John,  nearly  deposed,  416 

Joint  stock  principle,  its  effect  on 
prices,  312 

Jones  Loyd  and  Co.,  bills  of,  217 

Judges,  effect  of  their  getting  freeholds, 
41 ;  immovability  of,  424 

Justice,  administration  of,  its  value  in 
developing  nationality,  296 

Justice  of  peace,  his  function  and 
action,  297 

Justice-room,  less  effective  than  Manor 
Court,  143 

Justices'  assessments,  number  of  ex- 
istent, 40 


Ket,  insurrection  of,  151 
Kidd,  Captain,  execution  of,  108 ;  321 
King,  Gregory,  his  estimate  of  wages, 
44 ;  on  production  in  England,  53  ; 
his  law  of    prices,  55 ;    on  saving 
powers  of  a  bishop  and  a  farmer, 
175,   his  law  of    prices,  250;    on 
power  of  saving,  267 
King,  Lord,  his  action  in  1811,  224 
King's   College,   Cambridge,  its   pay- 
ments to  Edward  IV.   and  Henry 
VIIL,  423 
Kings,  deposition  and  murder  of  by 

English,  273 
Kings,     English,    what    they    were 
expected  to  do  with  their  revenues, 
413 
King's  estate,  nature  and  extent  of, 

119 
King's  peace,  why  kept  in  England, 

9 
King's  taxes,  fiction  of  the,  399 
Kingston  estate,  rents  of,  1690,  168 
Kitchin,  Dean,  on  St.  Giles'  fair,  Win- 
chester, 284 


Labour,  rise  of  price  of,  266 ;  impor- 
tation of  into  the  United  States,  and 
its  value,  407 

Labourers,     prosperity    of     in     the 


^36 


INDEX. 


fifteenth  century,  34 ;  position  of  in 
first  half  of  eighteenth  century, 
270 

Labour  partnerships,  little  noticed  by 
«--  political  economists,  307  ;  proscribed 

till  1825,  314 

Labour  statute  of  Elizabeth,  provisions 
of,  38,  sqq. 

Labour  statutes,  number  of,-  40 

Laissez  faire,  a  principle  with  the 
French  economists,  348  ;  when  to  be 
acknowledged,  350 

Lancashire,  at  first  the  poorest  English 
county,  149 

Land  Bank,  the,  in  1696,  222 

Land,  distribution  of,  in  the  mediaBval 
village,  14 ;  historical  changes  in 
ownership  and  occupation  of,  52 ; 
owners  of,  make  laws,  163 ;  in 
Colonies,  surrender  of  to  Colony, 
337  ;  Mr.  Mill's  theory  on  its  incre- 
ment, 515 

Land  hunger  of  fifteenth  century,  its 
effects,  264 

Landless  man,  how  understood  in 
early  England,  295 

Landlords,  English,  repaired  buildings 
and  insured  stock,  169 

Landowner,  duty  of,  174  ;  great  privi- 
leges and  exemptions  of  the,  358 ; 
Adam  Smith's  view  of  the,  376 ;  his 
right  to  rent,  61 ;  early,  the  in- 
structors of  the  farmers,  54 ;  of 
eighteenth  century,  tbeir  action,  58  ; 
the  cause  of  agricrUural  trouble, 
166 ;  transference  of  liabilities  of 
the  others,  164 ;  their  services  to 
agriculture  in  the  eighteenth  cen- 
tury, 177  ;  their  folly  and  injustice, 
238 ;  the,  of  the  eighteenth  century, 
their  services,  269  :  agricultural,  and 
horse  racing,  their  different  actions, 
374 ;  action  of,  after  Mr.  Goschen's 
book  was  published,  498 

Landowners,  English,  their  policy  in 
1773,  491 

Land  system,  English,  and  the  families 
358 

Land  tax,  assessment  of,  155 ;  re-im- 
position of,  462;  re-assessment  of, 
contemplated  by  Walpole,  466 

Langdon,  Thomas,  his  survey  of  Gam- 
lingay,  59 

Latimer  on  landlords,  171 

Latin  Union,  silver  issues  of,  189 

Law  and  order,  interest  of,  a  stock 
^       phrase,  454 


Law,  corruption  of,  while  keeping  to     ^ 

the  letter,  41 
Law  makers,  incompetence  of,  326  *' 

Laws,  collection  of   all  English,   23  ; 

economic,  which  human  and  which       y 

natural,  234 
Lead,  relations  of,  to  silver,  186 ;  prices 

of,  as  an  index  of  silver  prices,  259 
League,  Anti-Corn  Law,  dissolution  of 

the,  349 
Learning,  special,  has  a  price,  356 
Lease  for  years,  its  occurrence  early, 

66 
Leaseholds,  enfranchisement  of,  497 
Leases  of  Colleges,  character  of,  180 
Leather  industry,  great   in  London, 

408 
Leeward  Islands,  proprietors  of,  330 
Legislature,  power  of,  over  wages  and 

profits,  239 
Lenders  of  money  not  patriots,  439 
Letters,  safe  delivery  of.  Post  office 

not  responsible  for,  by  law,  505 
Liabilities,  always  fixed,  120 
"  Libel  of  English  Policy,"  its  object 

and  facts,  101 ;  its  information,  150 
Linen  manufacture,  special  seats  of, 

410 
Liverpool,  Lord,  on  ratio  of  gold  and 

silver,  188 ;  on  merchants'  petition, 

315 
Loanable  money,  plenty  in  England, 

396 
Loans,  why  made  by  colonists,  394  ; 

of  the  Dutch,  origin  of,  437  ;  facility 

of   making  a  serious  matter,  445 ; 

two  processes  of  creation,  450 
Local  charge,  first  in  time,  poor  relief, 

484 
Local  debt,  origin  of,  and  payment  of 

by  occupiers,  426 
Local  interest,  causes  of  colonial  loans, 

444 
Local  taxation,  development  of  mod- 
ern,  486 ;    two  recent  attacks  on, 

497 ;  motion  of  author  on,  in  1886, 

500 
Locke  King,  on  Lord  King's  action, 

224 
Locke,  on  the  recoinage,  200 
Lollard,  the,  his  social  and  poUtical 

tendencies,  80 
London,  by  far  the  largest  town,  148  : 

notes  at  first  circulated  in,  princi- 
pally, 258 ;    filthiness  of,  and  un- 

heaithiness    of,  263;    a    centre  of 

trade,  401 ;   a  vast  manufacturing 


INDEX, 


637 


city,  408;  financial  influence  of, 
448 

London,  City  of,  its  estate,  west  of  St. 
James,  origin  of,  496 

Lords,  the,  Standing  Order  of,  509 

Louis  XIV.,  on  the  last  pistole,  95; 
his  opinion  of  Davenant's  abilities, 
425 

Louis  XVI.,  policy  of,  its  effects,  319 

Lovell,  Lord,  the  price  of  his  wool, 
62  ;  his  farming  book,  and  his  pro- 
fits, 177 

Lowe,  Mr.,  and  new  Poor  Law,  248 ; 
the  author  of  school  examinations, 
358 ;  on  the  transference  of  income 
tax  by  traders,  477 

Lowther,  Mr.  Jas.,  on  competition  in 
collieries,  230 

Lubbock,  Sir  J.,  his  Shop  Hours  Com- 
mittee, 355 

Luxuries,  difficulty  of  defining,  368 

Lynn,  King's,  early  importance  of,  282 

M. 

Macaulay,  criticism  of  his  history,  5  ; 
on  the  English  clergy,  87  ;  probably 
saw  no  perfect  copy  of  Houghton, 
214 ;  on  Nonconformists,  215 ;  had 
not  duly  weighed  Davenant's  essay, 
426;  on  William  III.,  427;  on  the 
public  debt,  446 

MacCulloch,  Mr.,  on  Dutch  rates  of 
interest,  110 ;  on  the  discovery  of 
the  Kicardian  theory  of  rent,  161 ; 
his  absurdity  about  rent,  236 

Madox,  his  antiquities,  13 ;  early  in- 
dications of  apprenticeship  in,  301 

Magdalene  College,  Oxford,  charter  to 
from  Henry  VIII.,  423 

Magistrates,  assessments  of  wages  by, 
1593-1684,  241 

"  Making  of  England,"  hollowness  of 
the  phrase,  272 

Malthusian  theory,  some  economists 
on  the,  477 

Manor  courts,  jurisdiction  of,  effectual, 
142 

Mansions,  rating  of  unfair,  140 

Manufactures,  prohibited  in  the  Colo- 
>        nies,  331 ;    economy  and  impro^^e- 
^        ment  simultaneous  in,  521 

Manufactures  by  Government,  origin 
of,  519 
^    Manufacturing  regions,  generally  he- 
^       retical,  79 

MamL  judges,  oath  of,  344 


Margaret  of  Anjou,  her  army,  and  ita 

effects,  25  ;  her  northern  army  in 

1461,  145 
Mariner's  compass,  use  of,  278 
Maritime  enterprise,  England  slow  in, 

319 
Mark,  the,  the  unit  of  Teutonic  curr- 
encies, 184 
Market,  non-protection  of  and  width 

of,  stimulants  to  production,  371 
Markets  and  fairs,  very  distant  fre- 
quented, 284 
Mark  Lane  Gazette,  average  crops  in, 

370 
Marlborough,  request  that  a  pension 

should  be  settled  on,  refused,  430 
Marling,  custom  of,  170 
Mary,  her  wish  to  restore  the  currency ; 

the  day  of  her  death  kept  as  a  hoh- 

day,  198 
Mason,  wages  of,  in  Oxford  440  years 

ago,  303 
Masses,   endowments    of,    apparently 

free  of  law  of  mortmain,  305 
May,    highest    prices    generally    in, 

56 
Maynard,  Serjeant,  his  reply  to  William 

III.,  41 
Meonwaras,  settlement  of  the,  284 
Merchants     and     governments    view 

money    differently,    95;    London, 

their    objections    to    the    bonding 

system,  399 
Merchants'  petition,  Lord  Liverpool  on, 

345 
Merton  College,  Oxford,  its  cultivation 

in  1333-6,  52 ;  its  survey  of  Gam- 

lingay,  59 
Metaphysicians  discuss  apologies  for 

taxation,  460 
Methuen    treaty,    the,    in    1703,    its 

policy,  112 
Mickle,   his  translation  of  Camoens, 

he  reviles  Adam  Smith  in  its  notes, 

348 
Migrations,  during  civil  war,  probable, 

159 
Mill,  Mr. ,  on  wage  fund,  17 ;  on  the 

purchase  of  the  landowner's  interest, 

51 ;   his   sinister  predictions,   229 ; 

on  buying  out  landlords,  237 ;  his 

defence  of  poor  law  relief,  244 ;  on 

wages  fund,  308;    on    wages    and;. 

profits,    316 ;     on    '*  the    price    of  ^^ 

liberty,"  342  ;  on  retaliatory  tariffs, 

379;    a  happy  expression  of,  381; 

his  defence  of  Protection  in  "  young 


538 


INDEX, 


and  rising  nations,"  examined,  386, 
sqq. ;  deference  of  colonists  to  opin- 
ions  of,  441 ;  on  laxes  on  inheri- 
tance, 472 ;  on  precarious  incomes, 
476 ;  his  defence  of  the  relief  of 
destitution,  489 ;  on  taxation  of 
accidental  fertility,  498 ;  on  making 
the  state,  the  universal  landlord, 
514 

Mining  countries  not  necessarily 
wealthy,  259 

Mischief-makers,  meanness  of,  374 

Moleyns,  Adam  de,  on  Irish  gold,  258 

Monasteries,  dissolution  of,  their 
wealth,  35  ;  the,  contrived  the  stock 
and  land  lease,  65 ,  treasures  of, 
enormous,  420 

Monastic  lands,  grantees  of,  their  obli- 
gations, 357 ;  property,  very  scat- 
tered, 484 

Money,  impossibility  of  keeping  in, 
96 ;  circulation  of,  188  ;  power  of  a 
bank  to  coin,  a  misconception,  218  : 
the  basis  of  notes  and  credit,  219 ; 
depletion  of,  not  yet  an  extinct 
delusion,  392 

Money,  old,  did  not  disappear,  198 

Monk's  Act,  and  civil  servants,  612 

Monopoly,  price  of,  to  be  fixed,  354 

Montacute,  Earl  of  Salisbury,  his  sym- 
pathy with  the  rebels  of  1381,  29 

Montague,  his  attitude  at  the  Recoin- 
age,  200 ;  his  project  of  the  Bank  of 
England,  214 

Montfort,  Simon  de,  his  Parliament, 
and  his  motive,  121 

Morrill,  Mr.,  his  tariff  and  his  motives, 
294  ;  the  price  of  his  tariff,  384 

Mortimer,  overthrow  of,  417 

Moscow,  march  to,  and  the  uniform  of 
French  soldiers,  292 

Muratori,  his  colleciion  of  diplomas, 
4 ;  his  Antiquitates,  92 ;  on  gold 
currencies,  189  ;  on  Italian  banking, 
207 

Musical  instrument,  land  bearing  rent, 
compared  to  by  the  Duke  of  Argyll, 
48 

N. 

Napoleon,  his  commercial  policy,  215 ; 

an  idol  of  idiots,  his  character,  292 
Nation,    benefit    to,    collectively,    by 

primary  education,  357 
National   Debt,  a  guarantee    of    the 

settlement,  448 


National  laws,  discovery  and  adapta- 
tion of,  effects  of,  49 

National  ledger,  interpretation  of,  389 

National  pride,  phrases  appealing  to, 
333 

Navigation  Act,  effects  of,  327 

Navigation,  once  a  knack,  now  an  art, 
257 

New  College,  Oxford,  its  house  pro- 
perty in  1453,  169  ;  possesses  speci- 
mens of  early  cloth,  285 

New  England,  soil  of,  uninviting,  322 

Newspaper  tax,  imposition  of,  464 

Newton,  Sir  I.,  on  the  recoinage,  200 

Nicholls,  Mr.,  and  new  Poor  Law,  248 

Nimeguen,  peace  of,  effects  of,  460 

Nobles,  sons  of,  in  the  Church,  64; 
great,  intrigues  of,  in  France,  482 

Nonconformists,  their  cohesion  and 
influence,  215 

Norfolk,  early  opulence  of,  89 ;  indus- 
tries of,  144  ;  its  early  position,  149 

Norfolk,  North,  talk  in,  about  Lord 
Lovell's  farming,  177 

Norman,  Mr.,  on  Bank  of  England, 
224 

Northern  England,  rudeness  and  pov- 
erty of,  145 

North,  Lord,  his  attitude  on  the 
American  tea  duty,  469 

North,  Roger,  on  the  circulation  of 
specie,  392 

Nory,  his  precedents  for  ship  money, 
136 

Notes,  natural  limitation  of,  issues  of, 
217 ;  inculation  of,  218 ;  early  de- 
nominations of,  high,  258;  bank, 
restraint  of  issue  of,  360  ;  incon- 
vertible, why  circulated,  441 

Nullum  Tempus  Act,  origin  of,  433 


Oaths  taken  on  Land  Tax,  462 
Obligations,  local  in  England,  483 
Obloquy,  newspaper,  to  sensible  men, 

cackle,  332 
Obstacles,  greatest  to  human  progress, 

ignorance  and  science,  289 
Occupancy,  local  taxation  on,  unfair, 

494 
Occupiers,  payment  of  taxes  by,  said 

to  be  payment  by  owners,  498 
Ofi&cial  clergy,  class  of,  72 
Old  Testament,  reading  of,  its  effects,  ^ 

78 
Omnibus  Bills,  their  purpose,  405 


INDEX. 


539 


Open  fields,  system  of,  59 ;  custom  of, 
a  hindrance  to  agriculture,  178 

Opposition,  irrational,  not  always  met, 
by  calling  it  so,  363 

Orange,  house  of,  its  degradation,  435 

Oresme,  Bishop  of  Lisieux  on  money, 
95 ;  on  the  circulation  of  specie, 
392 

Organization,  its  universality  in  early 
English  life,  295 

Oriel  College,  its  purchase  of  a  rever- 
sion, 67 ;  its  trade  in  masses,  &c., 
305 

Outlaws,  haunts  of,  142 

Overstone,  Lord,  his  opinions  on  the 
Bank,  224 

Oxford  city  and  university,  assess- 
ments of  1693,  156 

Oxford  Colleges,  house  property  of 
pre-Keformation,  how  procured,  305 

Oxford  professor,  a,  on  American 
paper  currency,  37 

Oxfordshire,  its  early  relative  wealth, 
149 

Oxford,  the  origin  of  all  religious 
monuments  in  England,  illustrated, 
73  ;  the  farm  rent  of,  128;  St.  Mary's 
church  at,  its  use,  144 ;  roads  of, 
ancient  and  modern,  491. 

Oxford  town,  its  municipality  sub- 
jected to  the  University,  298 


Painters,  English  school  of,  late,  274 

Palmerston  Lord,  his  adage  rejected, 
345 

Papal  clergy,  types  of,  72 

Paper  currency,  forced,  in  England, 
201 ;  why  accepted,  220 

Paper  issues  of  Austria  and  Eussia, 
effects  of,  189 

Paper,  manufacture  of,  in  England, 
280 

Paper  money,  issue  of,  in  American 
War,  384 

Parliament,  rolls  of,  imperfect,  127 ; 
tries  punishments  before  remedies, 
200;  theory  and  practice  of,  346; 
relations  of  to  railways,  353 ;  a 
mouthpiece  for  popular  indignation, 
421 ;  the  old,  a  travesty,  448 ;  alone 
able  to  create  a  monopoly,  462 ; 
claims  right  of  taxing  the  Colonies, 
468  ;  the,  of  1529,  its  duration  and 
its  acts,  485 ;  limitations  on  the 
functions  of,  503 


Parliament,  Irish,  its  corruption,  431 

Parliamentary  franchise,  the,  of  1406 
and  of  1430,  297 

Parish,  English,  its  position  as  a  social 
unit,  description  of,  13 

Parishes,  close  and  open,  effects  of 
245 

Parish  life,  exceedingly  insulated,  283 

Paris,  Matthew,  his  opinions,  72  ;  on 
the  condition  of  England,  139 ;  on 
reign  of  Henry  III.,  170 

Paris,  peace  of,  1763,  state  of  Europe 
at,  290 

Parnell,  Sir  H.  (Lord  Congleton),  his 
financial  proposals,  474 

Parochial  settlement,  law  of,  and 
origin  of,  245  ;  law  of  an  appeal  to 
old  traditions,  295 

Passport  system  of  12  Ric.  II.,  31 

Past  and  present,  continually  muddled    ^ 
by  writers,  304 

Pasture  rents,  rise  of,  180 

Paterson,  his  earlier  career,  108 

Patriots,  Indian,  their  criticism  on 
loans,  and  answer  to,  440 

Peace,  armed,  what  it  means,  294 ; 
maintenance  of  and  charges  of,  on 
whom  it  should  be  imposed,  493 

Peace  of  1815,  one  of  languor,  292 

Peasant,  with  land,  his  advantages, 
240 

Peasant,  English,  his  life,  15 ;  his 
superiority  to  those  of  France  and 
Germany,  16;  his  early  struggles 
for  freedom,  his  present  attitude,  82 

Peasant  or  artizan,  sacrifices  of,  in  the 
education  of  his  children,  great,  357 

Peasantry,  outbreaks  of,  81 ;  organiza- 
tions of,  300 

Pecok,  Bishop,  his  teaching,  83 

Peel,  his  defence  of  his  income  tax, 
131 ;  his  famous  question,  What  is 
a  pound?  201;  and  Bank  Act  of 
1844,  224 :  premature  death  of,  226 ; 
his  tariff  reforms,  443  :  services  of, 
and  abilities  of,  455 ;  financial  posi- 
tion on  his  coming  to  ofi&ce  in  1841, 
475  ;  on  post  ofiBce  reform,  b04 

Peel,  Sir  Eobert  (the  first),  on  Irish 
trade,  and  the  Irish  Union,  327 

Peer,  a,  his  tactics  with  his  personal 
property,  474 

Peers,  claims  of,  to  writ  of  summons, 
133 

Penal  code,  the,  in  Ireland,  81 

Penn,  William,  pension  to  heirs  of 
330 


540 


INDEX, 


Pennsylvania,  workmen's  houses  in, 
497 

Penny,  supposed  degrad^ition  of,  185 

Pepper,  price  of,  100 

Pepys,  his  correspondence  with  Houb- 
lon,  215 

Permanent  and  terminable  loans, 
difference  of,  446 

Personal  government,  extinction  of,  in 
England,  448 

Personal  property,  taxes  on  inheritance 
of,  471,  sqq. 

Pessimism,  economical,  a  risk,  229 

Philip  II.,  his  resources  in  money, 
95  ;  and  Bank  of  Genoa,  211 ;  origin 
of  his  resources,  260 ;  his  loans  in 
Genoa,  434 

Philip  le  Bel,  his  quarrel  with  Boni- 
face VIII.,  74 

Phillips,  Prof.,  on  the  extent  of  coal 
measures,  230 

Philologers,  their  occupations,  275 

Philosophy  of  history,  its  progress  and 
its  risks,  5 ;  illustration  of  para- 
doxes in,  308 

Phrases,  their  power  over  men,  329 

Piracy,  why  an  offence  which  all  may 
punish,  398 

Pitt,  Elder,  his  objects,  318 

Pitt,  his  income  tax,  131 ;  his  action 
in  1797,  201 ;  his  real  breach  of  law 
in  1797,  216;  his  policy,  and  his 
relations  to  the  Bank,  223 ;  death 
of,  its  attendant  circumstances,  349 ; 
his  respect  for  Adam  Smith,  349 ; 
his  "patriotic  loan"  a  failure,  439  ; 
in  1798,  makes  the  Land  Tax  per- 
petual, 463  ;  his  accession  to  office, 
470;  successors  of,  their  finance, 
474 

Plague,  Great,  causes  of,  and  effects  of, 
263 

Plague,  the,  of  1349,  its  effects,  21 

Plantations,  American,  their  origin, 
322 

Plate,  silver,  price  of,  195 

Plautus  on  relations  of  man  to  man, 
341 

Police,  modern,  origin  of,  493 

Political  economists,  their  practical 
errors,  7  ;  generally  in  the  right  on 
financial  questions,  454 

Political  economy,  neglect  of  econo- 
mical facts  by,  2;  illustrations  of 
its  speculative  side,  50 ;  nearly  all 
the  fallacies  of,  partially  true,  307 

Political  nicknames  in  Flanders,  278 


Political  pamphlets,  importance  of  two 
centuries  ago  and  onwards,  424 

Poll  taxes,  beginning  of,  129 

Pomeranian  leather,  a  special  import, 
410 

Poole,  Mr.,  visited  by  American 
citizens,  and  why,  368 

Poor,  doctrine  that  they  should  live 

•  on  the  land  affirmed,  243 ;  harshness 
of  political  economists  to,  310 ;    de- 

^  sire  of  fair  traders  to  make  a  raid 

'  on,  372  ;  maintenance  of  the,  a 
growing  charge,  486  ;  relief  on,  not 
settled  on  economical  grounds,  489 

Poor  Law,  derivable  from  the  bad  acts 
of  government,  244  ;  ancient  defence 
of,  487 

Poor  laws,  between  1541  and  1601, 241 

Poor  priests,  foundation  of  order  of,  77 

Poor  rate,  return  of,  at  1685,  43  ;  in- 
cidence of,  in  1685,  159 ;  relative 
amount  of,  in  1685,  246 ;  payment 
of,  by  those  who  do  not  employ 
labour,  488  ;  the  distribution  of,  to 
various  objects,  489 

Pope,  the,  expensiveness  of  his  Court, 
187 

Population,  amount  of,  in  England,  at 
different  times,  53 ;  abundance  of, 
no  necessary  test  of  prosperity,  140 
in  England,  calculations  on,  157 

Porter,  on  the  Progress  of  the  Nation, 
446 

Portsmouth,  created  or  restored  by 
Henry  VIII.,  518 

Portugal,  discoveries  of,  320 

Postal  notes,  res^traints  on,  507 

Post  office,  the,  best  illustration  of 
governmental  work,  504 

Pound,  the,  unit  of  currencies  derived 
from  Roman  system,  184 

Poverty,  expedients  to  relieve  by  law, 
242 

Precious  metals,  how  procured  in  non- 
producing  countries,  257 

Presbyterians  of  seventeenth  century, 
now  Unitarians,  85 

Prestige,  its  influence  in  France,  460 

Price,  the  giver  of  a  price  attracts  the 
dealer,  397 

Price,  his  sinking  fund,  455 

Prices,  rise  of,  cause  of,  17 ;  regula- 
tion of,  general,  25 ;  wages  do  not 
rise  with,  37  ;  evidence  of,  as  to 
degeneracy  of  coins,  194;  laws  of, 
251,  sqq.  ;  causes  affecting,  253 ; 
rise  in,  historical  epochs  of,  257  j 


INDEX. 


541 


general  tiniformity  of,  from  l'>Cf)  to 
1540,  262  ;  high,  occasions  on  wiiich 
they  induce  high  wages,  373 

Primogeniture,  effect  of,  at  first  un- 
important, 63 

Printing,  an  invention  of  foreigners, 
280 

Prisons  and  hospitals,  taxes  for,  494 

Private  coining,  little  risk  of,  190 

Private  interest,  doctrine  that  it  is  a 
public  duty,  an  impudent  fallacy, 
882 

Privileges,  purchase  of,  128 

Proclamations,  Elizabeth's,  volume  of, 
40 

Pioducer,  Government,  like  a  protec- 
tion for  manufactures,  623 

Production,  cost  of,  260 ;  motive  of, 
the  expectation  of  a  market,  370 

Professional  classes,  wages  of,  small, 
301 

Professional  incomes,  taxes  on,  477 

Professors,  Oxford  and  Cambridge, 
statistics  of,  370 

Profit,  the  vital  object  to  get  a  balance 
of,  391 

Profits  increase  more  rapidly  than 
wages,  306 

Profits,  natural,  in  what  sense  used,  340 

Promissory  oaths,  fuiility  of,  296 

Propertied  classes,  their  services  to 
agriculture,  414 

Property,  respect  for  in  England,  gene- 
ral but  peculiar,  24 ;  not  a  basis  of 
notes,  and  why,  221 

Property  taxes,  graduated,  instances  of, 
124  ;  grants  were  nearly  always, 
127  ;  of  fifteenth  century,  ctia- 
racter  of,  130 

Proprietory  rights,  attempts  to  deal 
with  in  Parliament,  330 

Protection,  to  corn,  given  in  1660,  270; 
definition  of,  vague  and  shifting ; 
advocates  of,  365  ;  not  quoted  fully, 
306;  object  of,  368;  must  be  on 
articles  of  necessary  use,  and  con- 
siderable, 369  ;  "  robbing  somebody 
else,"  375 ;  in  United  States,  its  his- 
tory, 383 

Protectionist  countries,  cries  in,  316 

Protectionist  manufacturers,  an  in- 
direct advantage  to,  406 

Protectionists  employ  their  imagina- 
tions like  painters  and  poets,  411 

Protective  tariff,  effects  of,  261 

Protectorate,  taxation  of  landowners 
during  the,  422 


Provisions,  rise  of  after  1541,  240 

Proxies,  origin  of,  183 

Public  characteis,  contradictory  criti- 
cism of,  6 

Public  Debt,  English,  its  origin,  447 

Public  Debts,  best  conditions  for  crea- 
ting, 443 

Public  schools,  endowments  of,  appro- 
priated by  the  rich,  355 

Public  service,  gains  in,  466 

Public  stocks,  income  tax  on,  a  practi- 
cal repudiation,  443 

Purchase  of  land  by  state,  effects  of, 
bad  Mr.  Mill's  proposal  been  carried, 
615 

Purchase  of  railways  by  the  state, 
arguments  for  and  against,  510, 
sqq. 

Puritan  movement,  social  character  of, 
84 

Puritans,  their  character,  44 ;  colonies 
of,  321 ;  their  extent  and  influence, 
458 

Q. 

Quakers,  rise  of  the,  85 
Quarter  sessions,  the  conduct  of,  in 
rating  mansions,  406 

R. 

Eack  rents,  origin  of,  67 

Kailway  Rates  Bill  of  1886,  author's 
comments  on,  in  Parliament,  353 

Railways,  control  of,  necessary,  353 ; 
Biitieh  charges  put  on,  354  ;  loans 
for,  444;  construction  of,  in  Eng- 
land and  elsewhere,  509 

Raleigh,  bis  Eldorado,  321 

Rates,"  "  Book  of ,  issues  of,  and  effects, 
135 

Rating  Act,  the,  of  William  IV.,  496 

Raw  material,  not  easy  to  define,  and 
why,  256 

Real  estate  remained  liable  to  land  tax, 
and  why,  4i;3 

Reasons,  wise  not  to  give,  502 

Rebellions,  colonial,  how  met  and  con- 
doned, 836 

Recoinage  by  Elizabeth,  facts  of, 
195 

Reciprocity,  attractions  of  to  some 
minds,  325 

Re-exportation  great  from  the  United 
Kingdom,  400 

Reform  impossible,  if  the  doctrine  of 


542 


INDEX, 


vested  interests  is  extended  or 
strained,  352 

Reformation,  English,  its  true  pro- 
moters, 84 

Religion,  extirpation  of  a,  possible, 
89 ;  people  give  more  liberally  to, 
than  to  want,  242 

Religion,  wars  of,  interpretation  of 
characters  in,  12 

Religious  movements,  conditions  of,  80 

Religious  opinions  honestly  entertained 
and  enforced,  69 

Remigius,  a  German  paper-maker  in 
England,  280 

Rent,  compared  to  the  hire  of  a  musical 
instrument,  48 ;  history  of  defini- 
tions of,  160 ;  of  no  interest  but  to 
the  landowner,  165 ;  regulation  of 
in  Europe,  175;  the  last  received 
in  distribution,  233 ;  its  real  posi- 
tion, 236 ;  attacks  on,  238 ;  in  seven- 
teenth century,  and  comments  on  it, 
267 ;  agricultural,  rise  of  in  Eng- 
land, 293 ;  why  considered  a  fit  sub- 
ject of  taxation,  463 

Rents,  early,  fixed  and  unalterable, 
15 ;  arable,  ancient  amount  of, 
167 ;  pasture,  ancient  amount  of, 
167  ;  do  not  depend  on  prices,  271 ; 
forcible  elevation  of,  process  of,  173  ; 
not  so  much  affected  by  cattle  and 
sheep-raising,  179 ;  rise  of,  in  seven- 
teenth century,  199 ;  not  necessarily 
raised  by  protection,  374 

Republic,  Roman,  nationalized  land, 
and  with  what  effect,  51 

Republic,  Athenian  and  Roman,  loans 
negotiated  by,  448 

Repudiation,  risks  of,  340 

Restoration  does  not  always  follow 
reform,  350 

Restoration,  the  ruling  of  lawyers  at,  422 

Resumption  Bill,  Walpole  on,  in  1702, 
465 

Retaliation,  policy  of,  examined,  379 

Revenue  of  Crown,  'fixed  and  inelastic, 
415 

Revolution,  the  efiects  of,  in  relation  to 
the  Crown  and  its  estate,  428; 
financial  situation  of,  456 

Revolution,  English,  of  1642,  sects  of, 
85 

Revolution,  French,  interruption  of 
commercial  treaties  by,  113;  Arthur 
Young  ou  the,  269 ;  paper  of,  442 ; 
character  of,  and  interference  with, 
470 


Revolutions,  causes  of,  in  English 
history,  432 

Rhenish  cities,  origin  of  wealth  of,  10 

Rhine,  policy  of  France  as  regards  the, 
287 

Ricardo,  his  definition  of  rent,  161  ; 
his  merits  on  currency  questions, 
185 

Richard  I.,  captivity  of,  its  cost,  120 

Richard  II.,  state  of  society  at  begin- 
ning of  reign  of,  78 ;  and  De  Vere, 
417 

Rich,  different  law  for,  and  poor, 
471 

Richelieu,  his  policy,  458 

Richmond,  Duke  of,  descent  of,  and 
grants  to,  352 

Risk,  its  relation  to  profits,  19 

Ritual,  character  of,  during  Elizabeth's 
reign,  421 

Roads,  early  condition  of,  483 ;  main- 
tenance of,  a  just  tax  on  land- 
owners, 490 

Rock  salt  quarried  but  not  refined, 
277 

Roman  Empire,  survivals  of,  70 ;  the, 
ruined  its  subjects,  393 

Rothschild,  Lord,  on  foreign  stocks, 
390 

Royalists,  their  conduct  to  the  peasants 
in  1642-5,  25 

Rubens,  his  apotheosis  of  Villiers,  Duke 
of  Buckingham,  274 

Russia,  attempts  of  England  to  reach, 
103  ;  its  use  of  gold,  190  Cn- 

Russian  corn  trade,  shock  to,  by 
mean  war,  293 

Rymer,  his  diplomatic  collection,  92 


Salisbury,  Earl  of  (Cecil),  early  history 
of  the  family,  136,  422 

Salt,  price  of,  illustrates  the  price  of 
wheat,  and  why,  57 ;  importance  of, 
277 

Salted  meats,  general  use  of,  277 

Samson,  Abbot,  his  good  offices  at 
Oxford,  298 

Sanuto,  work  of,  in  1321,  104 

Saturn,  limbo  of  some  political  econo- 
mists, 503 

Savages,  irruption  of,  on  Roman  Em- 
pire, why  successful,  254  ^/ 

Savings  banks,  post  office,  restraints 
on,  507 

Savings,  various  destinations  of,  438 


INDEX. 


543 


Scarborough,  fee-farm  rent  of,  128 

Scientiiic  witnesses,  disputes  of,  363 

Scotch  universities,  Parliamentary 
grants  to,  indefensible,  363 

Scotland,  customs  duties  in,  123; 
degradation  of  pound  in,  197 ;  assess- 
ment of,  in  1657,  153;  wealth  of 
from  Tay  to  Tweed,  363 

Scott,  Sir  W.,  his  descriptions  of  Scot- 
tish life,  123 

Securities,  export  of,  meaning  of,  99 ; 
export  of,  causes  for,  396 

Seignorage,  practice  of  exacting,  202 

Selden,  his  dissertation  on  tithes,  162 ; 
on  the  King's  Exchanger,  187 ;  his 
dispute  with  Grotius,  278 

Selim  I.,  his  conquest  of  Egypt  and 
its  effects,  11 ;  his  conquest  of  Egypt, 
107 

Serfs,  emancipation  of,  the  effect  of, 
the  insurrection  of  1381,  30 

Servility,  worst  traits  of,  332 

Session,  Parliamentary,  ceremony  of 
closing,  281 

Settlement,  Act  of,  immunity  of 
judges  under,  424 

Seventeenth  century,  importance  of 
economical  facts  in,  2 ;  prices  and 
population  of,  57 ;  calculation  of 
population  in,  158;  rents  of,  174; 
men  of,  265 

Seven  years  taken  generally  as  a  period 
of  qualification,  301 

Seven  Years'  War,  effect  of,  on  Ameri- 
can plantations,  291;  fiscal  effects 
of,  468 

Shaftesbury,  Lord  (the  late),  on  the 
Factory  Acts,  and  their  limited 
scope,  355 

Shakspeare like  Prosper©  in  the  ♦•Tem- 
pest," 265  ;  on  winter  garments,  286 

Sheep,  breeds  of,  62  ;  losses  of,  insured 
by  landlords  in  the  fifteenth  century, 
109 ;  keeping  of,  in  England,  273 

Sheep  feed,  produce  of,  on  acre,  231 
Ship  money,  its  imposition,  136 ;  as- 
sessment of,  151 
Shippon,  his  attitude,  296 ;  his  esti- 
mate of  himself  and  of   Walpole, 
466 
Shotover  boar,  story  of  the,  490 
Sicily,  attempt  to  secure   crown  of, 

121 
Siemens,  his  furnace,  233 
Silk  manufacture,  London,  in  the  fif- 
teenth century,  282 
Silver  coin,  fineness  of,  184 


Silver  greatly  produced  in  England, 
186;  need  of,  for  Eastern  trade, 
391 
Sinclair,  Sir  John,  his  services  in  Scot- 
land, 60,  270 ;  on  apprenticeships  in 
husbandry,  305 
Sion  Abbey,  its  home  farm,  66 

Sion,  abbess  of,  pressure  put  on,  264 ; 
foundation  of  abbey  of,  418 

Sixteenth  century,  scanty  information 
about,  151 

Social  and  political  causes  not  separ- 
able, 281 

Smiles,  Mr.,  his  books,  257 

Smith,  Adam,  on  rent,  51 ;  on  the 
mercantile  system,  96 ;  borrows  from 
Turgot  his  canons  of  taxation,  115 ; 
why  he  called  rent  a  tax,  164,  165 ; 
on  prices  and  wages,  181 ;  his  phrase 
about  international  money,  190 ;  on 
the  Bank  of  Amsterdam,  212;  his 
theories  of  rent,  235 ;  on  lotteries, 
259;  on  apprenticeship,  300;  his 
description  of  colonial  manufactures, 
331 ;  on  the  Colonial  Empire,  338 ; 
endeavours  to  get  him  a  place  on 
the  Bengal  Council,  348 ;  on  the 
Protectionists  of  his  day,  376;  on 
the  Colonial  Trade  Acts,  378;  on 
nations  and  governments,  393 ;  on 
rents,  economic,  competitive,  fixed, 
415  ;  on  the  conceit  of  nations  and 
individuals,  445 ;  on  taxation,  461 ; 
Pitt  said  to  be  a  disciple  of,  but  how, 
470 

Smith,  Goldwin,  and  the  Colonies 
twenty-five  years  ago,  335 

Smollett,  his  novel,  "  Humphrey  Clin- 
ker," 484 

Smuggler,  difficulty  of  dealing  with,  at 
Eevolution,  461 ;  difficulty  of  coping 
with  the,  464 

Smuggling,  cessation  of,  465 

Socialism,  best  answer  to,  is  social 
equity,  316 ;  strength  of,  in  what, 
352  ;  stimulants  of,  497 

Social  state  of  England,  how  affected 
by  law,  24 

Society,  may  lose  some  arts,  but  is  safe 
if  it  retains  others,  253 

Sole  market,  acquisition  of  the,  and 
its  effects,  290 

Sole-market  tiieory,  the,  described,  323 

South  Sea  Bubble,  fruit  of  the  Assiento 
treaty,  449 

Sovereigns,  English,  their  continental 
circulation,  202 


544 


INDEX. 


Sovereign,    the,    dependence   of,    on 

Parliament,  and  legislation  of  1850, 

126 ;  Crown  estate  does  not  belong 

to,  431 
Spanish  Colonies,  Government  of  the, 

320 
Spain,  trade  of   England  with,  103; 

its  conquests  in  the   New  World, 

107 ;  discoveries  of,  320  ;  war  with, 

in  1739,  467 
Speaker,  his  address  to  the  Crown,  134 
Speenhamland  Act,  its  object,  247 
Spillman,  a  German  paper-maker  at 

Dartford,  280 
Spinning,  a  universal  occupation,  143 
Spinola,  and  bank  of  Genoa,  211 
Squatters,  Colonial,  impudence  of,  336 
Stafford  on  landlords,  171 
Stamp  Act,  the,  468 
Stanhope,  Lord,  his  absurd  motion,  224 
Stanhope,  Lord,  his  political  portraits,  6 
State,  limits  of  agency  of,  311 ;  should 

define  what  contracts  it  enforces,  and 

how  far,  343 ;  result  of  land  being 

owned  by,  516 
State  rights  in  the  American  Union, 

theory  of,  481 
Statesmen,  duty  of,  in  economical  in- 
ductions, 8 ;   ignorance  of  and  its 

causes,  344 
Statesmen,  European,  their  alliances, 

602 
States  of  the  Union,  defaulting,  lesson 

given  to,  340 
State,  the,  finding  capital,  illusory,  18 
Statute  of  Labourers,  enacted,  and  its 

provisions,  26 
Stephenson,  the  younger,  his  dictum, 

353 
Stock  and  land  lease,  the,  its  character, 

64 
Stock  Exchange,  its  weakness  and  its 

strength,  339 
Stock  Exchange  securities  cannot  be 

conveniently  taxed,  383 
Stock,  railway,  distribution  of,  513 
Stocks,  conversion,  process  of,  452 
Stourbridge,  fair  of,  282 
Strike,  a,  rarely  successful,  and  why, 

315 
Stuart,    kings,     thefts    of     bankers' 

money  by,  212 
Stuarts,    their    policy  as    to    judges' 

patents,  41 
Subsidy,  amount  of,  fixed,  but  is  les- 
sened, 126 
Substitutes  for  money,  early  use  of,  205 


Success  in  wealth-getting  honoured, 

312 
Successions,  Pitt's  tax  on,  examined, 

471 
Succession,  war  of,  combatants  in  the, 

64 
Sugar,  slave  grown,  objections  to,  and 

facts  as  to,  329 
Sumptuary  laws,  effectiveness  of,  377 
Superintendence,  wages  of,  their  profit, 

19 
Supplementary  estimates,  bad  finance, 

451 
Supreme  Court,  American,  decisions 

of,  481 
Surrender,  by  Colonial  Office,  to  Colo- 
nies, in  what  directions,  337 
Suspension  of  cash  payments,  debate 

on,  223 
Sussex,  forges  and  glass  furnaces  of, 

287 
Sutton's  culture,  character  of,  231 
Sweden,  source  of  iron,  276 
Swift,  on  the  customs,  123,  464;  his 

political    philosophers    of    Laputa, 

457 
Sworn-off  gold,  origin  of  the  phrase, 

187 

T. 

Tandridge,  graduated  local  taxation 
in,  124 ;  relief  of  poor  at,  243 ;  de- 
scription of,  and  local  taxes  at,  484 

Tallage,  the,  of  towns,  120 

Tallages,  liability  to,  128 

Tanning,  partial,  a  practice  in  foreign 
leather  trade,  410 

Tariff,  protectionist,  a  war  in  disguise, 
334 ;  American,  local  defence  of,  384 ; 
reform  of,  in  Walpole's  time,  466 

Tariffs,  Colonial,  meaning  of,  337 

Taxation,  canons  of,  ambiguous,  116  ; 
arbitrary,  restraint  of,  120  ;  motion 
on,  by  author,  131 ;  various  grounds 
for,  alleged,  460 ;  present  distribu- 
tion of,  478 

Taxation,  English,  early,  pecuUar,  115 

Taxes,  distribution  of,  a  proper  subject 
for  a  director  of  criminal  investiga- 
tion, 370;  imposed  atEevolution,461 

Taxes,  sanitary,  who  should  pay,  495 

Tax,  new,  difficulty  of  levying,  446 

Tax,  rem'^ins,  to  some  extent,  on  those 
who  first  pay  it,  499 

Tea,  use  of,  said  to  have  caused  an  in- 
crease of  rates,  246 


INDEX. 


545 


Telegraph  companies,  scandalous  pur- 
chase of  the,  506 

Tenancy  at  will,  origin  of,  late,  67 

Tenant,  his  position  to  landlord,  359 

Terminable  annuities,  effect  of  income 
tax  on,  476 

Terminable  securities,  how  affected  by 
income  tax,  447 

Terrorism  in  the  United  States,  385 

Teuton,    imitative   and    occasionally 
^'        intrusive,  294 

Teutonic  certificates,  their  value,  275 

Teutonic  irruption,  character  of,  70 

Teutonic    race    manufactures  some 
V  thing     besides    metaphysics     and 

testimonials,  410 

Textile  industries,  diffused  in  England, 
281 

Thimble  money,  origin  of  name  of, 
136 

Thiilby,  Bishop,  his  paper  mill,  280 

Thirty  Years'  War,  causes  and  provo- 
cations of,  287 

Tillage,  decimal  fraction  of  land  gone 
out  of,  370 

Tin,  produce  of,  in  England,  283 

Tithe,  payment  of  rates  by,  its  defence, 
488 

Tobacco,  Virginian,  importance  of, 
322 ;  Spanish,  cost  of,  323 

Tobacco  tax,  the,  of  Sir  S.  North  cote, 
499 

Tolls  taken,  but  roads  not  mended, 
490  ;  receipts  from  decline,  491 

Tone,  Wolfe,  his  language  about  the 
Irish  House  of  Commons,  432 

Tories  had  better  writers  than  Whigs, 
464 

Tories,  historic,  authors  of  the  peace 
of  Utrecht,  449 

Torrens,  Colonel,  on  the  Bank  of 
England,  224 

Tower  pound,  weight  of,  184 

Towns,  taxation  of,  peculiar,  127 ; 
organization  of,  297  ;  local  taxation 
of,  508 

Trade,  British,  assistance  given  to 
Americans  due  to  a  desire  to  break 
up,  331 

Trade  follows  the  flag,  maxim  ac- 
cepted, 291 

Trade,  its  aids  to  international  mor- 
ality,  93  ;  international  character  of, 
99 ;  early  English,  small  and  pre- 
carious, 302;  reciprocal,  effects  of, 
326 

Trade  profits,  principle  of,  109 


Traders  do  not  desire  to  keep  money, 

94  ;  prudent  rule  of,  406 
Trades,  organization  of,  298 
Trans-shipment,  an  easy  evasion  of 

retaUating  duties,  380 
Treaty  of  1861,  character  of,  113 
Troy  pound,  weight  of,  184 
Truck,  defence  of,  and  condemnation 

of,  359 
TuU,  Jethro,  on  rent   in  eighteenth 

century,  176  ;  on  rents,  268 
Turgot,  his  canons  of  taxation,  115 
Turk,  the,  his  mischievous  presence, 

107 
Tzar,  his  policy  ten  years  ago,  how 

determined,  439 


U. 


Ulster,  linen  weaving  by  peasants  of, 

84  ;  bye-industries  in,  175 
Unearned  increment,  hope   for,  per- 
petual, 237 
Unemployed,  the,  statistics  of,  370 
United  Kingdom,  its  proportion  of  the 

world's  trade,  408 
United  Siates,  circulation  of    green- 
backs in,  37  ;  risks  to  agriculture  in, 
271 ;  protection  in,  malignant,  366 ; 
advocates  of  protection  in,  avoiding 
their  own  case,  369 ;  protection  in, 
its  history,  383  ;  exports  of,  and  ex- 
planation of,  402 ;  growth  of  trade  of, 
recent,  407 ;  building  laud    in  the, 
497 
Unit,  social,  weakness  of  tbe,  342 
Universities,  the  incorporation  of,  298 
Universities  and  Colleges  Act  1576,  its 

tendency,  171 
Universities,  EngUsh,  founded  by  pri- 
vate munificence,  363 
Usury,  laws  regulating,  94 
Usury  law,  abrogation  of,  343 
Utility,  connection  of  art  with,  275 
Utrecht,  treaty  of,  its  effects  on  Eng- 
lish trade,  320 


V. 

Vaccination,    compulsory,  opposition 

to,  363 
Valuations,  for  taxation,  Edward's,  122 
Van  der  Weyer,  M.,  on  Belgian  thrift, 

438 


36 


546 


INDEX. 


Vansittart,  Mr.,  on  the  Bullion  Com- 
mittee, and  his  motion,  224 ;  his 
action,  454  ;  his  incapacity,  474 

Vegetables,  garden,  came  from  Hol- 
land, 289 

Venice,  Bank  of,  and  the  practice  of 
the  Eepublic,  209 

Vicarious  responsibility,  characteristic 
of  English  life,  121 

Village  guilds,  endowments  of,  306 

Villiers,  Mr.  C.,  his  return  of  wages, 
248 

Vincent,  Mr.  Howard,  his  advocacy  of 
protection,  his  earlier  calling,  his 
action  in  Parliament,  366 

Virginia  trade,  character  of,  326 

Volcanoes,  social   all    over   Europe, 


Wadham,  Dorothy,  her  architect,  274 

Wage-fund  theory  of  Mr.  Mill  criti- 
cized, 308 

Wages,  receipt  of,  its  analogy  to 
profits,  19  ;  do  not  rise  with  prices, 
37  ;  actually  paid  higher  than  that 
allowed,  44;  cannot  keep  up  to 
prices,  266 ;  poor  rate,  a  rate  in  aid 
of,  and  why,  487 

Wakefield,  Gibbon,  his  colonial 
scheme,  337 

Wall  Street  gamblers,  and  soft  money, 
223  ;  their  intrigues,  and  the  conse- 
quences, 384 

Walpole,  his  treatment  of  public  debt, 
450;  his  parliamentary  powers,  465, 
sqq. ;  his  project,  and  his  enemies, 
399  ;  his  consolidated  debt,  452 

Warehousemen,  London,  their  agency, 
404 

War,  invariable  language  of  govern- 
ment about,  393 ;  just  and  neces- 
sary, a  short  phrase,  454 

War  of  Spanish  succession,  cost  of, 
463 

War  of  Succession,  1453-1485,  charac- 
teristics of,  265 ;  in  the  fifteenth 
century,  its  causes  and  character, 
419 

Wars,  European,  since  1815,  very 
destructive,  293  ;  European,  succes- 
sive characteristics  of,  324 ;  effects 
of  various,  470 

Warwickshire,  open  or  common  fields 
in,  178 


Water  companies,  valuation  of  the,  in 
1880,  513 

Watt,  importance  of  his  invention, 
267 

Waynflete,  founder  of  Magdalene  Col- 
lege, Oxford,  his  practices,  66 

Wealth,  kinds  of,  17 ;  production  of, 
causes  of,  227  ;  teaching  of  political 
economy  on,  partial,  310 

"Wealth  of  Nations,"  delay  in  the 
publication  of,  348 

Weaver,  a,  synonymous  with  a  heretic, 
91 ;  generally  a  heretic  in  the 
Middle  Ages,  376 

Weight,  payments  by,  the  practice, 
arguments  for,  191  sqq. 

Wells,  David,  on  cost  of  freight,  232 

Wesley,  movement  of,  88 ;  on  slavery, 
329 

Westminster  monks,  their  home  farm, 
extorted  by  the  Kussells,  06 

Weymss,  Lord,  as  a  speculative  poli- 
tician, 351 ;  on  socialism  at  St. 
Stephens,  497 

Wheat  and  labour,  prices  of,  inference 
from,  6 

Wheat,  ratio  of,  to  barley  and  oats, 
251 ;  highest  relative  price  of,  252 ; 
rise  of  price  of,  266 ;  heavy  protec- 
tion on,  in  the  cost  of  freight,  369 

Whig,  modern,  picture  of  a,  a  lampoon, 
425 

Whigs,  monied,  their  support  of  the 
Act  of  Settlement,  88  ;  first  directors 
of  Bank  of  England  generally,  214; 
and  what  sort  of,  215 ;  historic, 
created  the  wars  of  Spanish  succes- 
sion, 449 

Whitbread,  IVIr.,  his  attempt  to  make 
allowances  legal,  247 

Whiteley,  Mr.,  character  of  his  busi- 
ness, 406 

White,  William,  his  history  and  fate, 
79 

William  the  Norman,  policy  of,  71 

William  the  Primate,  proclamation 
addressed  to,  in  1349,  26 

William  HI.,  his  position  in  Holland 
and  in  England,  427;  the  floating 
debt  a  scandal  to  his  government, 
449 

Wiklif ,  career  of,  73 

Wilkes,  defended  as  a  Nonconformist, 
87 

Willoughby,  voyage  of,  320 

Woods  and  Forests,  office  of,  charges 
against,  517 


INDEX. 


547 


Wool,  American  production  of,  368 
Woolcomber,  art  of,  285 
"Wool,  English,  its  importance,  9 
Wool  taxes,  the,  amount  of,  129 
Wool  tax  of  1341,  its  distribution,  146 
Working  classes,  laissez  Jaire  breaks 
down  in,  352 ;  their  position  deteri- 
orated after  1782,  469 
Workman,  what  he  has  to  sell,  313 
Workmen,  subjection    of,    causes  of, 
240 ;  dislike  those  who  refuse  to  aid 
their  organization,  317 
Wykeham,  William  of,  hia  mitre  case 
and  valise,  286 


Y. 


York,  house  of,  asks  for  few  grants, 
132 

York,  statute  of,  its  importance,  122 

Young,  Arthur,  on  rent  in  eighteenth 
century,  176 ;  on  increase  of  poor 
rates,  246;  on  eighteenth  century 
agriculture,  268  ;  on  the  early  days 
of  the  French  Bevolution,  269 ;  on 
Irish  landowners  and  rents,  376; 
reports  sent  to,  379 

Younger  son,  the,  when  he  becomes  a 
nuisance,  64 


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